Gold Prices Slide Towards Second Weekly Drop

Gold fell Friday in what appeared to be its second straight weekly retreat as the Eurozone crisis, which has yet to be contained let alone solved in two years, threatens the supply of money to Europe's banks, businesses and governments.

Soaring yields on Italian and Spanish bonds are now being followed by yields on French bonds climbing to dangerous levels. That threatens European banks holding the ever-chepaer bonds of debt-choked Eurozone members and, as a result, discourages European banks from lending to one another and U.S. money market funds from making loans to those banks. Unless the pattern is checked, the result is less and less money available for European banks, businesses and governments.

Even the bonds of Europe's top economic engine, Germany, tumbled Wednesday to their lowest level in nearly a month in an auction that managed only to sell about half of the bonds being offered.

The euro, meanwhile, languished at a seven-week low against the dollar, which was up 0.42 percent against a basket of currencies to 79.69.

In Asia, stocks fell: the Hang Seng index tumbled 1.37 percent, and the Straits Times index declined 1.24 percent.

European equity indexes posted losses for the ninth session in the last 10 as they headed towards their biggest weekly drop in two month.

U.S. stocks, which fell for the sixth straight session on Wednesday, were set to open lower with futures on the Dow Jones Industrial Average, the Nasdaq 100 and the S&P 500 were down about 0.5 percent.

Gold for December delivery on the Comex fell $19 to $1,676.90, while gold for immediate delivery was off $20.33 to $1,677.21.

Silver for December delivery on the Comex declined 69 cents to $31.20, while silver for immediate delivery retreated 59 cents to $31.10.