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by ForexNewsNow Team on November 24, 2010

Korean Crisis Boosts U.S. Dollar and Gold

Gold as a Safe HavenCommodities weaker due to stronger USD, gold perceived as safe haven

Recent worries about Irish sovereign debt along with further widening of Portuguese, Italian and Spanish CDS rates were in shadow of tensions on Korean peninsula yesterday.

Increased risk aversion triggered a rally in US dollar, which is currently trading slightly above 1.33 EUR/USD.

Such environment is certainly not favorable from the view of commodities. Base metals’ prices fell across the board, Brent front month ICE contract dipped below 82.5 USD/bbl first time since the end of October.

Apart from US dollar and US bonds, gold is clearly perceived as a safe haven. Bearing in mind that interpretation of current price at nearly 1380 USD per troy ounce might be negatively affected by relatively strong US dollar, the gold price in EUR is close to the top achieved in early June this year.

EUR in GoldContent provided by: KBC Bank

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