Article from TheStreet.com
Gold price Falls as Dollar Rises
Alix Steel
01/21/10
NEW YORK (TheStreet) -- Gold prices fell toward $1,100 an ounce Thursday after President Obama vowed to shake up Wall Street with strict limits on bank's trading activity. Also, the U.S. dollar hit a five-month high against the euro. The author attributes this to a rising U.S. dollar, making dollar-based commodities like gold more expensive to buy in other currencies, often creating the inverse correlation between prices and the dollar.
Steel also states that increased worries over Chinese credit tightening is contributing to gold's slide. China has already ordered its banks to curb lending, but these inflationary figures could put more pressure on the country to restrict lending. An end to free money from China, which has stimulated the global economy, will continue to curb investor interest in purchasing gold as an alternative asset.
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