Gold prices fell Thursday as the euro slid to a three-week low versus the dollar, pressured by news that European officials considered delaying a bailout package for Greece which fuelled fears the heavily indebted nation could face a chaotic default. Spot gold was down 0.5 percent at $1,718.19 an ounce at 1019 GMT, while US gold futures for February delivery were down $7.70 an ounce at $1,720.40. It remains up 10 percent in the year to date, but is well off the record $1,920.30 it hit last year at a time that bad news from the euro zone tended to have a positive effect on gold, which some saw as a haven from turmoil in other markets. “Gold stopped being a safe-haven store of value some time around August or September, when you had a huge spike in prices, followed by a collapse,” said Natixis analyst Nic Brown. “Gold price volatility was as high as some of the other financial assets you might have been trying to get away from.” “Given that it is (now) trading like another commodity, the correlation with the dollar is one of the key determinants.” The euro slid 0.5 percent against the US unit after EU sources said euro zone officials are considering ways to delay some or all of a 130 billion euro bailout package for Greece, while still avoiding a messy default. Some euro zone finance ministers are unconvinced that all Greece's political leaders are fully behind the reforms. A weak euro and consequently stronger dollar tends to weigh on gold prices, as they make dollar-priced commodities more expensive for other currency holders, and reduce the metal's appeal as an alternative asset.
