European shares drop again, Portuguese stocks skid (Euro markets getting hammered!)

LONDON (MarketWatch) -- European shares fell sharply again on Wednesday, extending steep losses from the previous session, as fears of peripheral sovereign debt default continued to weigh on markets and Portuguese stocks in particular.

Gold, in Euros, Hits Record

By DEVON MAYLIE

LONDON—With concerns over the sovereign-debt crisis in Europe growing, gold traded in euros set a new intraday record.

Gold traded in euros traded above €890 ($1,117.66) a troy ounce, up from its old high of around €868 earlier in the week, although it has since retreated somewhat. Gold in dollar terms, meanwhile, was down after a sharp rise Tuesday, weighed by weaker equities. Spot gold recently traded at $1,164.75/oz, down 0.2% from Tuesday’s close.

Spot silver was at $17.98/oz, down 0.9%. LME platinum was at $1,704.50/oz, down 0.5%. Spot palladium was at $536.50/oz, down 1.6%.

Standard & Poor’s cut the credit ratings of Greece and Portugal Tuesday, triggering a drop in industrial commodities, equities and the euro, and a rise in gold, which traders and analysts said is again acting as a haven for investors who want to flee assets deemed riskier.

The downgrades heightened fears that the debt issues in Europe are far from resolved and that other nations could be hit with similar downgrades.

“At the moment, the propensity on the part of European investors, and perhaps even governments, to own euro- or sterling-denominated assets is reduced, while their propensity to move euro-denominated assets into something ‘harder’ is higher and is rising,” said Dennis Gartman of the Gartman Letter.

Gold’s relatively small bump in dollar value reflects a temporary confidence in the $USD relative to the Euro.

It may not be temporary. I see lots of stuff these days about the Euro reaching parity with the USD. Germany made all kinds of very bad (mostly real estate) loans to East European nations and Germany is the economic engine of the EU. Thus the entire EU may have been more degenerate than the USA during the bubble years

I can easily see a rising USD and rising gold at the same time

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