Precious Metals Retreat as Dollar Rallies, Silver Plunges – March 24, 2010

by Bullion Prices Staff on March 24, 2010

US gold futures, as well as other metals, plunged Wednesday as the euro stumbled and the dollar soared after Fitch downgraded Portugal debt one notch. Renewed worries over debt issues in Greece were also in the limelight.

"The Euro currency dropped Wednesday on continued uncertainty regarding a European Union financial rescue package for heavily indebted Greece," wrote Jim Wycloff of Kitco News. "That investor uncertainty was heightened and selling pressure on the Euro increased overnight when Fitch downgraded Portugal’s sovereign debt rating."

In New York precious metal prices, April gold declined $14.90, or 1.4%, to $1,088.80 an ounce. The yellow metal had a low of $1,087.60 and a high of $1,106.00. May silver tumbled 38.6 cents, or 2.3%, to $16.641 an ounce. April platinum fell $20.60, or 1.3%, to $1,587.90 an ounce.

"Uncertainty looms and a potential disagreement on further action within euro-zone policy makers could add selling pressure to the euro," Andrey Kryuchenkov, an analyst at VTB Capital in London, said in a report that was cited on Bloomberg. That may "pull gold prices lower."

In London bullion prices, the afternoon gold fix was $1,090.75 an ounce for a decline of $10.75. Silver fell 10 cents to $16.680 an ounce. Platinum was settled down $12.00 to $1,586.00 an ounce.

"The Fitch downgrade of Portugal didn’t help matters for the euro," VTB Capital analyst Andrey Kryuchenkov said on Reuters. "That was another addition to already negative sentiment, another kick to the euro. Gold is trading completely against the dollar at the moment."

New York crude oil for May delivery declined $1.30, or 1.6 percent, to $80.61 a barrel. Gold, considered a hedge during times of high inflation and economic uncertainty, tends to follow oil and move opposite to the U.S. dollar. A rising greenback makes dollar-denominated commodities, like bullion, more expensive for holders of other world currencies.

In bullion coin news, the United States Mint today unveiled this year’s America the Beautiful Quarters Designs. These will be featured on the five circulating 2010 quarter-dollars, and also replicated on the new .999 fine silver, five-ounce America the Beautiful Silver Bullion coins that the Mint will strike later in the year. In total, 56 silver coins at a rate of 5 per year will follow each 25-cent pieces release between 2010 and 2021.

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