BLBG: Gold Falls as Dollar Gains After Report on Deficits in Europe
By Claudia Carpenter
April 22 (Bloomberg) -- Gold dropped in London after a report of large deficits in Greece and Ireland spurred investors to buy dollars, curbing demand for the metal as an alternative.
Greece’s deficit was 13.6 percent of gross domestic product last year and Ireland’s was 14.3 percent, the European Union’s statistics office in Luxembourg said today. The dollar rose against the euro and European equities declined.
“Gold is responding first to a stronger U.S. dollar or weaker euro as deficit figures for the EU are coming in,” said Bayram Dincer, a commodity analyst at LGT Capital Management in Pfaeffikon, Switzerland. “The second response could be risk aversion.”
Gold for immediate delivery dropped $4.30, or 0.4 percent, to $1,142.45 an ounce at 10:49 a.m. local time. The futures for June delivery on the Comex in New York declined 0.6 percent to $1,142.40.
To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net.
