Thursday, June 7, 2007

Gold, Silver Drop as Higher Interest Rates May Curb Demand for the Metals

(Bloomberg) -- Gold and silver fell in New York on
speculation that higher global interest rates will reduce demand
for precious metals as alternative investments.

Bond yields climbed around the world after the Reserve Bank
of New Zealand unexpectedly raised rates today. The European
Central Bank yesterday raised a benchmark rate to 4 percent, the
highest in six years, to temper inflation. Holding gold becomes
less attractive when rates rise because the metal has no fixed
returns.


Read more at Bloomberg Commodities News

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