www.gold.org
Gold is a chemical element with the symbol Au and the currency code is XAU. It is a highly sought-after precious metal which, for many centuries, has been used as money, a store of value and in jewelry. The metal occurs as nuggets or grains in rocks, underground "veins" and in alluvial deposits. Modern industrial uses include dentistry and electronics, where gold has traditionally found use because of its good resistance to oxidative corrosion.
Gold subdued in early deals
Gold make little headway this morning, settling at US$1,105/oz after almost reaching US$1,110/oz earlier in the day, facing pressure from speculation of a possible gold-backed European monetary fund.
The yellow metal was subdued by rumours that EU states are looking to set up a European monetary fund, which would be backed by their gold reserves. Speculation of possible moves by the EU to confront its mounting debt problem have heated up amid the meeting of European finance ministers that has kicked off in Brussels today with debt issues in some of the euro zone countries, primarily Greece, being on top of the agenda.
The uncertainly over Greece’s debt crisis has kept the euro under pressure for weeks, though worries eased two weeks ago when the debt laden country introduced a fresh package of economic austerity measures aimed at saving some €4.8 billion and conducted a successful bond issue to raise another €5 billion to meet its near term commitments. However, last week rating agency Fitch triggered another wave of jitters by promising to cut the current AA rating of another troubled euro zone country Portugal if its fiscal consolidation proceeds at a slow pace and proves insufficient. Portugal also conducted a bond issue, raising US$1.34 billion.
A stronger US dollar weakens gold, which is seen as a riskier alternative and usually moves inversely to the American currency.
News from China also weighed on commodities after the country reported that its inflation rate reached an annualised 2.7% in February despite the government’s measures to curb lending that were introduced in the previous month. China said that the rate was still within its 2010 target of 3%, though it was not enough to eliminate speculation of further monetary policy tightening in the country.
Other precious metals headed in different directions as silver declined to US$17.04/oz, while platinum improved to US$1,613/oz.
