Dollar Stages Late Rally; Gold Plunges
NEW YORK — The dollar staged a late rally Tuesday in the United States, overcoming earlier declines that followed the release of government reports of sluggish economic growth and large trade deficits.
As the dollar rallied in the face of negative economic news, gold plunged, staging its sharpest drop in four weeks.
Republic National Bank in New York said gold bullion for spot delivery was bid at $314.25 an ounce, down $10.50 from the bid Monday.
Much of the performance on currency and bullion markets resulted from technical trading.
Traders who had been betting that the dollar would fall had to scramble to buy dollars to either limit losses or lock in profits when the dollar failed to lose more ground after the discouraging reports.
Also affecting trading was the desire of traders to even up their currency holdings to reduce the risk of a swing in sentiment when many European markets close today in observance of May Day.
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