QMX Gold Corp. (fka QMXGF)

[the cork]

1359.00 - Gold May Slide as Dollar Rebounds
Against Euro, Limiting Investor Demand
By Nicholas Larkin - Nov 29, 2010 5:12 AM PT

Gold may fall in New York after the dollar rebounded against the euro, curbing demand for the metal as an alternative investment.

The dollar climbed to a two-month high against the euro as European governments handed Ireland an 85 billion-euro ($113 billion) aid package. The U.S. currency has gained as concern that military action on the Korean peninsula will escalate boosted demand for the dollar as a refuge. Gold, which typically moves inversely to the greenback, reached a record $1,424.30 an ounce on Nov. 9.

A stronger dollar “is putting pressure on gold prices,” Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said today in a report. While prices may be “supported by geopolitical tensions on the Korean peninsula, which is making gold look more attractive again as a safe haven,” the aid package for Ireland “could lessen this attraction a little,” he said.

Gold futures for February delivery lost $2.70, or 0.2 percent, to $1,361.60 an ounce at 8 a.m. on the Comex in New York. The metal for immediate delivery in London was 0.2 percent lower at $1,360.47.

Bullion rose to $1,360 an ounce in the morning “fixing” in London, used by some mining companies to sell output, from $1,355 at the afternoon fixing on Nov. 26. The dollar earlier today fell as much as 0.8 percent versus the euro.

Ireland Bailout

Ireland said it will pay average annual interest of 5.8 percent on the package, which breaks down into 45 billion euros from European governments, 22.5 billion euros from the International Monetary Fund and 17.5 billion euros from Ireland’s cash reserves and national pension fund. European finance chiefs agreed that a future crisis-management system won’t automatically cut the value of bond holdings.

U.S. and South Korean warships led by the aircraft carrier USS George Washington have begun four days of drills in the region. North Korea “will deal a merciless military counter- attack at any provocative act of intruding into its territorial waters,” according to a Rodong newspaper commentary carried yesterday by the North’s official Korean Central News Agency.

UBS AG lowered its one-month gold forecast to $1,325, from $1,425, London-based analyst Edel Tully said today in a report. The bank’s gold sales to India on Nov. 26 were the most since Oct. 27, “indicating that there’s much residual physical demand in the system that will provide ample support on dips,” she said.

China Gold Margins

In China, the Shanghai Futures Exchange will increase margins on gold, copper and aluminum after the market closes today as the country moves to curb speculation and restrain quickening inflation.

Gold assets in exchange-traded products fell 1.91 metric tons to 2,083.18 tons on Nov. 26, according to data compiled by Bloomberg from 10 providers. Holdings reached a record 2,104.65 tons on Oct. 14. Silver holdings dropped 159.99 tons to 14,770.3 tons, data from four providers show.

Silver for March delivery in New York was little changed at $26.775 an ounce. It reached a 30-year high of $29.34 on Nov. 9 and is up 59 percent this year.

Palladium for March delivery rose 1.1 percent to $686.55 an ounce. Platinum for January delivery was little changed at $1,644 an ounce.

http://www.bloomberg.com/news/2010-11-29/gold-declines-for-second-day-as-korean-tensions-drive-u-s-currency-higher.html