Gold, other

Gold, other metals fall as U.S. dollar rallies

NEW YORK (Nov 26) Gold and other metals futures fell Friday, as investors sold commodities and stocks and bought the U.S. dollar following renewed concerns over debt levels in the euro zone.

Stocks sell off on euro fearsStocks slump Friday amid continuing European sovereign-debt fears, even as Spain, Portugal continue to say they don't need bailouts. In the US, a better holiday season is widely expected. Rising tensions between North and South Korea, meanwhile, also pushed the dollar higher.

�Normally the headlines from Korea and the lower stock market would help gold, but the weaker euro [is] helping the dollar counters,� said George Gero, metals analyst at RBC Wealth Management, in a note.

Gold for December delivery slumped $17.10, or 1.3%, to $1,355.80 an ounce on the Comex division of the New York Mercantile Exchange.

The contract earlier hit an intraday low of $1,350.50 an ounce.

U.S. markets were closed on Thursday for the Thanksgiving holiday and volumes are expected to remain thin on Friday during a shortened trading session for most markets. Floor trading for metals, however, kept its hours and settles at its regular 1:30 Eastern time. See slide show of so-called Black Friday shopping.

How SPDR brought gold to investingThe revolution that opened gold investing to the masses and helped spur a record-breaking bull market was hatched in an act of desperation by an obscure gold-mining trade group. �Extended Thanksgiving holidays will likely keep trade thin and the [metals] complex remains vulnerable to further pressure as traders look to lock in profits and maintain cash positions to cover margin requirements,� said James Moore, London-based analyst at Fast Markets, in a research note.

Also pressuring gold prices was a rally in the U.S. dollar.

�The main negative factor is the firm U.S. dollar, which has risen to its highest level in two months versus the euro,� wrote analysts at Commerzbank in a note to clients. �Furthermore, the increase in the margins for gold futures trading on the Shanghai Futures Exchange is also having an adverse effect.�

The dollar index , which tracks the performance of the greenback against a basket of other major currencies, rose 0.6% to 80.36.

Dollar strength tends to pressure dollar-denominated commodity prices because it makes those commodities more expensive for holders of other currencies.

Other metals futures also dropped sharply.

Silver for December delivery fell, to $26.77 an ounce in electronic trade.

GoldCore, however, has forecast silver has some ways to �catch up� with gold.

�Silver, unlike gold, remains well below its nominal high of just over $50/oz in 1980,� the firm stated in a research note. �Hedge funds and investors with a knowledge of the technicals are targeting this level and will likely continue buying and accumulating until the price level has been reached.�

Palladium for December delivery slumped 2.5% to $678 an ounce. December copper dropped 2 cents to $3.74 a pound.