, IncMarch 3, 2010 – Gold prices rose again yesterday as Greek Prime Minister George Papandreou announced nearly $6.6 billion of budget cuts in an effort to lower the country’s mounting debt. The announcement was believed to contribute to a 0.4% drop in the US dollar against the euro, and helping April gold futures to rise $4.10 to $1,141.50 per ounce on the New York Mercantile Exchange.
According to the European Central Bank, Greece’s debt to gross national product has grown to 113%, affecting both the national economy and the price of the euro. “The currency market continues to dictate direction,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said in a report. “The problem with Greece’s financial health will not go away instantly. A temporary rebound in the single currency could well propel gold prices higher.” As of 11:00 AM EST today, gold prices stood at $1,142.60, up $7.10 for the day.
In addition to the budget cuts, the Greek Prime Minister also announced that the government will cut 30% from holiday payments civil servants receive. This move is seen as an attempt to gain additional favor with European Union leaders, who have demanded additional austerity measures from the government in Athens prior to any financial assistance from the Union.
Gold prices have climbed from near $1,098.00 per ounce last week as analysts see a drop in risk aversion to gold. The US Dollar Index currently stands at 80.33, a decline of 0.160 for the day.
Ronald Stevens
Senior Staff Writer - GoldPrice.net
