Greenback and Asian stocks suppress gold

A stronger dollar and retreating Asian stock indices, forced gold to drop below $1139.70 in the Asian session.

Loosing 0.3%, gold fell to $1138.70 per ounce, while silver is trading around $17.965. Platinum lost 0.4% and is trading at $1736.00, whereas palladium gained 0.2% rising to $564.50 per ounce.

Dollar's appreciation against the euro is affecting gold, as is the fear in the financial markets after the EU announced a higher than expected budget deficit in Greece, causing investors to use the dollar as a safe haven, while Moody's downgraded Greek debt rating again.

The dollar gained against the basket of major currencies to a four week peak, which in turn imposed heavy downward forces on gold. The yellow metal had gained 24% last year, while this year it has so far stayed above the psychological threshold of $1000.00 per ounce.

China's intervention into the rising prices of real estates has caused Asian stocks to drop, as this intervention is bound to negatively affect stocks of banks, financial institutions and real estate companies. Stocks of exporting companies fell further with the rise in the course of the Yen against the dollar and other major currencies.

Investors have been cautious to invest in basic commodities with the shadow of high public debts covering world economies especially Greece. During such a period investors head for low risk-low return assets.

S&P GSCI closed at 543.65 rising 1.26 points in yesterday's trading, the RJ/CRB closed at 277.12 after adding 0.37 points to the index.

Gold futures due June fell by 2.70% to $1140.200 at 2:44 EST, while silver futures gained 0.049% rising to $17.990 per ounce. Copper futures dropped by 0.900% to $349.750.