Gold prices reacted strongly to renewed hope from Europe.
(1888PressRelease) November 28, 2011 - MIAMI, FL - Gold staged a further comeback this morning as rumors broke that a solution might have been found for Italy's debt problems. Yet rumors were enough to give a boost to the euro and an accompanying boost to gold, pushing it back up to $1715. The suggestion was that there could be a rescue package worth 600 billion euros from the International Money Fund. However, the European Commission has since denied these rumors. Meanwhile, talks continue between European leaders on creating greater fiscal unity within the euro zone. This would mean some loss of sovereignty and independence on the part of the involved nations, in order to save the euro. Unpopular austerity measures, however, would be enforced by the European parliament.
"Gold has risen against a weaker dollar and is being supported by a stronger euro based on the hope of increased unity and the possibility of the ECB stepping in with long-term loans to countries in need," says Bill Hionas of Pan American Metals of Miami. "If this happens, we will certainly see a stronger euro, a weaker dollar and gold prices will pop. However, if this does not happen and the crisis in Europe escalates further, then we will eventually see gold acting as a safe haven, a role that has been taken over by the dollar at present. Either way, we can expect the price of gold to rise in the next few months."
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