Gold falls on rising dollar

London (Reuters): Gold prices slipped more than 2 percent in Europe on Friday as concerns over the ability of some smaller euro zone countries to service their debt battered the financial markets, sparking broad-based selling of commodities.

Worries that Ireland would, like Greece, need a bailout knocked the euro sharply lower against the dollar, while talk of a possible Chinese rate hike depressed commodities, pushing this week’s Group of 20 meeting in Seoul into the background.

Spot gold fell to a session low of $1,378 and was bid at $1,384,45 an ounce at 0950 GMT (4:50 a.m. ET), against $1,409.39 late in New York on Thursday. U.S. gold futures for December delivery fell $19.50 an ounce to $1,383.80.

The precious metal retreated swiftly from the record $1,424.10 an ounce it hit on Tuesday as the dollar’s rebound prompted selling of gold. However, in the longer term the metal, which unlike other commodities is widely seen as an alternative currency and a safe store of value, could be supported by concerns over financial market volatility, analysts said.

“This is a knee-jerk risk sell-off, and gold is getting dragged down with the rest of the complex,” said RBS Global Banking & Markets analyst Daniel Major.