World Business

Gold rallies on mounting fear over eurozone debt crisis

(Xinhua)
Updated: 2010-04-28 09:33

CHICAGO: Gold futures on the COMEX Division of the New York Mercantile Exchange ended higher on Tuesday, lifted by escalating concerns that the sovereignty debt crisis is mushrooming to other debt-plagued eurozone countries. Silver and platinum both closed sharply lower.

The most active gold contract for June delivery rose $8.2, or 0.7 percent, to finish at $1,162.2.

Ratings agency Standard & Poor's lowered Portugal's debt two notches to A- and Greece's debt to junk status on Tuesday , which means Greece was deprived of an investment-grade rating on its bond, and has to pay higher costs to borrow from the market.

Investors also worried about the fact that the potential threat of Greek default increased the borrowing costs of other indebted Eurozone countries such as Portugal and Spain, and hurt the economic recovery in the countries using the euro. Euro slipped on Tuesday against the dollar, and investors who have dialed down their risk appetite switched to gold for the purpose of safe-haven, and drove higher gold price.

May silver was down 21.8 cents to $18.119 per ounce. July platinum dropped $24.1 to $1,720.9 an ounce.