Gold prices fell for the first time in 10 days and oil slid Friday as jitters over debt problems in the Middle Eastern city of Dubai drove the dollar higher and pounded stocks. Investors grew worried this week that the emirate's government-backed investment company was in danger of defaulting on $60 billion in debt. The city's main investment arm said it was seeking more time to repay its borrowings. Overseas markets fell Thursday and Friday. US markets were closed Thursday for Thanksgiving but the Dow Jones industrial average tumbled 155 points in a holiday-shortened session Friday. The drop in riskier assets like stocks fanned demand for safe-haven investments, including the dollar. Commodities are priced in dollars and tend to fall when the dollar strengthens because that makes them more expensive for foreign investors. Gold for February delivery fell $13.10 to settle at $1,755.50 an ounce on the New York Mercantile Exchange. Investors have been pumping money into gold looking for protection from a falling dollar, which had lost its luster in recent months because record-low US interest rates made unattractive returns and because fear had been easing about the global economy. Other metals fell alongside gold. March silver slid 46.5 cents to $18.335 an ounce, while March copper futures fell 7.15 cents to $3.1255 a pound. December platinum fell $32.10 to $1,446.90 an ounce. The ICE Futures US dollar index, a widely used measure of the dollar's value against other currencies, rose. Energy prices also fell. Benchmark crude for January delivery fell $1.91 to settle at $76.05 on the New York Mercantile Exchange after falling more than $5 during trading. Also at the Nymex, gasoline for December delivery fell 7.14 cents to $1.9262 a gallon. Heating oil slid 2.79 cents to $1.9622 a gallon. Natural gas for January delivery rose 2.9 cents to $5.192 per 1,000 cubic feet. On the Chicago Board of Trade, March wheat futures fell 1.75 cents to $5.6975 a bushel, while March corn rose $5.50 to $4.135 a bushel. January soybeans fell 1.5 cents to $10.53 a bushel. Prices for cotton, coffee and cocoa fell. Orange juice and sugar rose. The dollar fell briefly to its lowest level in 14 years against the Japanese yen Friday but rallied against the euro and other currencies as Dubai's debt problems roiled currency markets. Analysts said they expected the dollar's recent strengthening against some major currencies to be short-lived. They noted the immense borrowing needs of the US government, which relies heavily on foreigners to finance budget deficits exceeding $1.4 trillion annually. Further declines in the dollar would help boost US exports on global markets. But they won't bolster the confidence of foreign investors who are needed to buy billions in federal government debt. The dollar briefly fell below 85 yen early Friday for the first time since July 1995 even as the US currency was strengthening a bit against the euro. Economists saw both moves as a flight to safety as investors reacted with concern to the Dubai debt crisis. The dollar managed to rise 0.2 percent on the day against the yen to trade at 86.70 yen. The dollar earlier touched 84.81 yen - its lowest level since July 1995. Traders sought the sanctuary of both the dollar and the Japanese currency after Dubai World, a government investment fund with debts totaling around $60 billion, asked creditors to postpone payments until May. Most US stocks fell this week as speculation Dubai will default on its debt. Among S&P 500 companies, 273 declined and 224 rose this week. The S&P 500 added less than 0.1 percent to 1,091.49 after climbing to a 13-month high on Nov. 25. The Dow Jones Industrial Average fell 8.24 points, or 0.1 percent, to 10,309.92. “Investors are selling into a vacuum. The collateral damage that will take place from the Dubai fallout is unknown. You're not going to know until the pros get back next week,” said an analyst.
