Gold holds steady as US dollar rises agaisnt euro
Gold traded within a narrow range today, enjoying support from safe haven buying amid concerns over Europe's debt problems, while feeling pressure from a stronger US dollar.
The US dollar rose against the euro after inventories data from the American Petroleum Institute (API) showed a massive gain of 2.4 million barrels in gasoline stockpiles in the US, pushing gasoline futures lower.
Gold is seen as an alternative asset to the US dollar and has an inverse relationship with the greenback.
Meanwhile, demand for safe haven assets remains high with traders fearing that Greece will have to default on its debt, which could hurt the credit ratings of other peripheral euro zone countries, further worsening the debt crisis in Europe.
Greece has recently been downgraded by Fitch from BB+ to B+, while Standard & Poor's lowered its outlook on Italy's debt rating from "stable" to "negative". Moody's said this week that a default by Greece would negatively affect the ratings of other euro zone members.
Gold last traded at US$1,525/oz. Silver and platinum climbed to US$37.18/oz and US$1,772/oz respectively.
Major mining companies weren't very active today. Lonmin (LON:LMI) shed nearly 1 percent, while other FTSE 100 constituents were broadly flat.
In the FTSE 250, African Barrick Gold (LON:ABG) and Aquarius Platinum (LON:AQP) lost nearly 1.5 percent, while Petropavlovsk (LON:POG) added 1 percent.
Notable risers among the small caps included diversified mining investment company ECR Minerals (LON:ECR) and copper and gold focused explorer and developer EMED Mining (LON:EMED), which added 5 percent and 4.5 percent respectively.
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