Gold has biggest drop in 16 months; Europe woes lift dollar

"The real story today is the renewed fears of sovereign debt problems in Greece, in particular, that is driving the U.S. dollar with hot money that is flowing away from risk assets," said Patricia Mohr, commodity market specialist at Scotiabank Group in Toronto.

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Gold has biggest drop in 16 months; Europe woes lift dollar

A loss of confidence in the Euro seems to have caused funds to flow back into the USD or positions to have been unwinded causing flows into the USD.  A raising dollar tends to lower commodity prices. 

Normally fear and uncertainty are more likely to cause precious metals to raise, but that was not the case in the last few days. It seems ironic that mounting debt problems in Europe would cause the USD , which has huge debt issues itself (see iousa - the documentary),  to appreciate.