World Business
Gold climbs as eurozone debt crisis intensifies
(Xinhua)
Updated: 2010-04-29 09:44
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CHICAGO: Gold futures on the COMEX Division of the New York Mercantile Exchange extended gains on Wednesday, as euro sank to one-year lows against US dollar amid intensified sovereignty debt crisis in Europe. Silver and platinum both dropped.
The most active gold contract for June delivery rose $9.60, or 0.8 percent, to finish at $1,171.80.
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Standard & Poor's' move on Spain after it cut Greece and Portugal's debt ratings Tuesday has underpinned investors' worries that the contagion from Greek debt crisis is spreading through the eurozone. Fears of prospective debt defaults drove investors to flock to hard assets like gold as a flight to safety in times of crisis.
Meanwhile, Federal Reserve's decision to keep interest rates near zero for an "extended period", despite a brighter US economic outlook has also added upward pressure to gold price, since lower interest reduced the opportunity cost of holding gold.
Fed's decision to keep its ultra-loose monetary policy stance also boosted oil price to bounce on Wednesday, and further lifted gold, as investors usually purchase gold as a hedge against oil- led inflation.
May silver was down 1.2 cents to $18.107 per ounce. July platinum dropped $7.3 to $1,713.6 an ounce.
