Gold’s sell-off coincided with a rebound in the U.S. Dollar Index

The gold price oscillated near $1,650 Thursday morning. Rumors out of Europe that its leaders were prepared to expand the size of the European Financial Stability Fund (EFSF) have led to increased volatility in gold prices as well as in the broader stock and commodities markets. The UK-based Guardian reported that France and Germany are ready to approve a 2 trillion euro rescue fund for Europe and its ailing banking system.

Gold’s sell-off coincided with a rebound in the U.S. Dollar Index (DXY), which recaptured the large majority of its earlier losses to trade down by just 0.1% at 77.091 this afternoon. The euro currency, which had been higher by as much as 0.8% at 1.3869 against the greenback, turned lower by 0.1% to 1.3741.

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