Precious metals fall as market pans euro deal

While the markets rallied briefly on Friday after news of near-unanimity on a package of austerity measures aimed at solving the persistent European debt crisis (Britain was the lone holdout), it was a different story on Monday morning, with European and North American stock markets tanking. The mining-heavy S&P/TSX Composite index had slipped 207 points, or 1.72%, at time of writing, while the FTSE 100 was off 101 points.

Investors flocked to the relative safe haven of the US dollar, hastened by a statement by credit ratings agency Moody’s which said “the intergovernmental changes agreed upon by 26 of the 27 European Union countries last week wasn’t ground breaking and that the countries’ ratings were still on the chopping block for a review in early 2012,” reported gold and silver watcher  The Street.

The euro fell to its lowest level against the US dollar in two months.

The deal agreed to by European leaders failed to initiate more involvement by the European Central Bank which many analysts say is the way out of the crisis. There was also no roadmap put forward on how to address stalling growth rates in several European countries, while holding up deep budget cuts as the only panacea for the debt problems, CNBC notes.