Gold's correlation with risk and the euro continues to
break down, placing the metal in good stead to benefit from Standard & Poor's
downgrade of European sovereigns Friday, says UBS analyst Edel Tully. "Gold
needs to react to this euro development in the right way, as a safe haven
asset. Otherwise it places the metal very much on a negative footing. So far
that sentiment is positive," Tully says. Gold's correlation with equities, at
0.31, is at its lowest since early November, she says. Gold's correlation to
the euro is near one-month lows. Spot gold +$4.65, or 0.3%, at $1,643.25/oz.
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