NEW YORK (TheStreet) -- Gold prices were falling Friday as Greek debt fears weighed on dollar backed commodities.
Gold for April delivery was sinking $12.10 to $1,082.60 an ounce at the Comex division of the New York Mercantile Exchange. Prices have trade as low as $1,097.70 and as low as $1,078.10. The U.S. dollar index was rising 0.74% to $80.58.
The euro was coming under pressure, which buoyed the dollar, after Greece's Gross Domestic Product contracted by 0.8% in the fourth quarter which was worse than expected. Although the European Union, IMF, European Central Bank as well as Germany and France have all pledged to support Greece, the news sparked fears that the financial situation was worse than anticipated.
Also curbing risk appetite for commodities was the news that The People's Bank of China raised the reserve requirement for banks by another 50 basis points. This restriction will further tighten lending in China, which has been hailed as stimulating the global economy
Investors are also closing out of some positions before the long holiday weekend adding to gold's downside. Many analysts expect price volatility to continue. "I would agree [with a range of] $1,060 to $1,100," says David Morgan, founder of Silver-Investor.com. "I want to see it get above $1,100 and stay there three days in a row. I'm just a little suspect that this isn't going to be a long term consolidation from here." Morgan expects the $1,000 an ounce support level to hold even with further consolidation.
Silver prices were slipping 33 cents to $15.25 while copper was falling 9 cents to $3.04.
