Gold futures were unable to hold onto the $900 level this morning as the U.S. dollar found strength amid the panicky swine flu scare, according to media reports.
Swine fever boosted the value of the U.S. dollar against major currencies on reported fears that the flu will pressure global economic recovery efforts. The dollar’s muscle drove gold for June delivery fell 2% overnight to open at $889.30 this morning.
The World Health Organization raised its pandemic alert to level 4 from level 3 and warned of a "significant risk", prompting intensified concern about the spread of swine flu. Major media outlets reported that the new strain of the H1N1 influenza virus heightened the appetite for the greenback as a safe haven. However, I would call the U.S. dollar anything but "safe" right now considering Uncle Sam’s massive construction of debt over the past several decades.
As worries over pig flu increased and airline and tourism-related stocks got hit, stock markets across the globe fell. The Nikkei was down almost 3% and was followed by losses of 2% or more in most European stock markets.
– luke
