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Gold sinks the most in two months

05 February 2010 10:25 (UTC +04:00)

Baku -APA-ECONOMICS. Gold plunged the most in two months as the dollar extended a rally, eroding the appeal of the precious metal as an alternative investment, Bloomberg reports.
The greenback climbed to the highest level since July against a basket of six major currencies as investors on demand for a haven. Before today, gold gained 25 percent in the past year, and the dollar fell 6.7 percent.
Gold futures for April delivery fell $37.90, or 3.4 percent, to $1,074.10 an ounce at 10:26 a.m. on the Comex division of the New York Mercantile Exchange. A close at that price would mark the biggest decline since Dec. 4.
Equities in Europe, Asia and the U.S. fell as debt concerns escalated in Greece, Spain and Portugal. The Reuters/Jefferies CRB Index of 19 raw materials dropped for the second straight day.
The euro weakened to its lowest level since June against the dollar after European Central Bank President Jean-Claude Trichet said the economic outlook is subject to â€œuncertainty.â€
Yesterday, holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, fell 1.58 metric tons to 1,110.34 tons.
Goldâ€™s losses accelerated today after the metal breached the 100-day moving average around $1,091, analysts said.
â€œThereâ€™s a lot of technical damage thatâ€™s triggering this landslide selling,â€ Zeman said.
Silver futures for March delivery fell 62.2 cents, or 3.8 percent, to $15.695 in New York.
Platinum futures for April delivery dropped $42.20, or 2.7 percent, to $1,534 an ounce. Palladium futures for March delivery slumped $12.85, or 2.9 percent, to $423.95 an ounce.