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London (pte023/02.06.2005/11:55) - A slump has hit the gold and euro markets in Europe, worrying some pundits, dealers and financiers.
The value of gold has reached a four-month low, falling from $416.50/417.20 to US$415.60/416.30 per troy ounce. In New York late Tuesday it hit market low with $413.
"I feel quite positive ob gold," a dealer said. "The euro is looking a bit sold out here and physical gold business is quite dramatic in terms of tonnes going out of London every week."
The euro slipped against the dollar on Wednesday, following France's 'no' to the EU constitution, and also after media reports about a European Monetary Union (EMU) http://www.stern.nyu.edu/~nroubini/Emu/Emu.htm meeting at which German Finance Minister Hans Eichel and Bundesbank President Axel Weber were present.
A report will be issued by the Bundesbank. However, according to a German Finance Ministry spokesman, Eichel sees no risk of EMU failure.
Traders say that the value of gold could drop even more if the euro dropped further, but analysts see the resistance of the bullion as a positive sign if US values due at the end of this week came in weaker than expected.
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