10 March 2011

Gold drops $20 on resurgent dollar in wake of Spanish debt downgrade

Traders take profits as greenback appreciates on economic oulook and Moodys Spanish downgrade

Gold took a $20 drop in afternoon London trading today as the US dollar rose on fears for the global economy and a weaker Euro. The downgrade of Spanish soveriegn debt by a notch by the ratings agency Moodys caused the euro to weaken while German bonds rose. Continuing Libyan strife failed to deliver the support to gold prices it recently had, as the market was looking for an opportunity to take a breather.

Traffic at BullionSupermarket increased as buyers looked for re-priced bargains, and auctions near to end time. Gold continues to be favored over silver in terms of the volume of price comparisons. However, Silver continues to lead transactions.

Falling Gold prices boosted premiums marginally. 1 oz Gold bars in the United States trade currently at 17.9% premium. In the United Kingdom 1 oz Gold Bars were priced at 18.69% premium. In physical Silver prices, 1 oz Silver Bars in the United States are asking 56.93% premium over Silver, and in the UK 1 oz Silver Bars asked 59% premium, though significantly down on the 79% premium being asked in February.


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