Gold Less Shiny, At 5 Week Low

The price of gold fell to its lowest level in five-week because of fears the Federal Reserve increase interest rates even quicker. This will cause inflationary pressures and reduce the value of gold as a hedge. From Bloomberg: ``There's growing evidence that inflation could develop,'' said Paul McLeod, vice president of precious metals at Commerzbank Securities in New York. ``The Fed's commentary that they're going to take action to contain'' inflation weakened the argument to buy gold as a hedge, McLeod said. ``Greenspan said he feared inflation, and you'd think gold would be going up,'' said Michael Wagner, owner of FIC Commodities, a precious-metals brokerage in New York. ``Put me on the list of people who are surprised.'' Some investors buy gold in times of inflation, which erodes the value of fixed-income assets, such as bonds. Gold futures surged to $873 an ounce in 1980, when U.S. consumer prices rose 12.5 percent from the previous year. More from From London: Spot gold was last at $427.00/427.70 per troy ounce, down from the New York late level of $431.00/431.75. It touched $425.80 in Asian dealings overnight, the lowest since February 21. The euro was around one month lows at $1.3043. Murdok | Breaking eBusiness News Your source for investigative ebusiness reporting and breaking news.