Drop in Gold seen due to Dubai Debt Concerns
Since the fears related to Dubai's debt problems kept on percolating around the world markets, a sharp pull back was witnessed Friday in gold futures, while the rest of the market broke a streak of recent record gains.
Recently, Dubai confirmed that repayment for nearly $60 billion debt was asked to be delayed by state-affiliated investment. After this announcement, investors opted for safer assets. Equities and commodities were also sold off on Friday by investors across major markets.
An increase by 0.3% in the Dollar Index was seen recently after a steeper hike earlier. This in turn led to bolstering of dollar, which pressurized the commodities.
A bounce by $13.10 was recently seen in Gold for February delivery, the most heavily traded contract on the New York Mercantile Exchange's Comex unit and settled at $1,175.50 an ounce.
A source said, "But with the dollar coming off highs and the precious metal's safe-haven appeal likely making a comeback, gold prices bounced off session lows when the contract hit $1,135.80 an ounce."
A drop by nearly 47 cents was seen in silver for March delivery to $18.34, due to a minor sink in March copper by 7 cents to $3.13.
Due to a drop by 3.8% in the Philadelphia Gold and Silver Index, mining stocks were some of the hardest hit in the abbreviated session on U. S. equity markets today.
