UPDATE 12 Noon 06/10/08: Gold fell the most in a week as the dollar climbed for the second straight day, reducing the appeal of the precious metal as an alternative investment. Silver also dropped.

The dollar reached a three-month high against the yen and rose against the euro after Federal Reserve Chairman Ben S. Bernanke said risks to the economy have faded, spurring speculation that interest rates will rise. Before today, gold climbed 38 percent in the past year as the dollar fell 15 percent against the euro.

“The Fed has shifted their concern from economic weakness to talking about fighting inflation,” said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. “Ultimately, gold is an international currency, and its biggest influence is still the dollar.”

Gold futures for August delivery tumbled $16.80, or 1.9 percent, to $881.30 an ounce at 10:37 a.m. on the Comex division of the New York Mercantile Exchange. A close at that price would mark the biggest percentage drop since May 29.

Silver futures for July delivery fell 26.5 cents, or 1.5 percent, to $16.945 an ounce. Before today, the price advanced 15 percent this year, while gold climbed 7.2 percent.

Gold rallied 39 percent from Sept. 17 to March 17, reaching a record $1,033.90, as the Fed slashed borrowing costs after a housing slump and a credit squeeze threatened to push the U.S. economy into a recession.Read Full Bloomberg Story Here

By Pham-Duy Nguyen

Gold tumbled the most in almost six weeks as the dollar rallied, reducing the appeal of the precious metal as an alternative investment. Silver plunged more than 5 percent.

The dollar climbed as much as 0.8 percent against a weighted basket of the euro, yen and four other major currencies on speculation that the Federal Reserve may begin to raise U.S. borrowing costs this year to curb inflation. Crude oil dropped below $128 a barrel after reaching a record $135.09 on May 22.

“With the dollar stabilizing, gold could fall quite a bit,” said Matt Zeman, a metals trader at LaSalle Futures Group in Chicago. “There’s a lot of talk about inflation, which works both ways for gold. If the Fed does start tightening, that will strengthen the dollar and could really pop the commodity bubble.”

Gold futures for August delivery dropped $23.30, or 2.6 percent, to $881.70 an ounce on the Comex division of the New York Mercantile Exchange. The percentage drop was the biggest for a most-active contract since April 18. The metal fell for the third straight day. The price reached a record $1,033.90 on March 17.

Silver futures for July delivery plummeted 90 cents, or 5.2 percent, to $16.515 an ounce, the biggest drop since March 20.

Read Full Bloomberg Article Here

U.S. paper money discriminates against the blind and must be redesigned to help sight-impaired people distinguish among dollar bills, tens, twenties and other amounts, a federal appeals court ruled.

The U.S. Court of Appeals for the District of Columbia Circuit, in a 2-1 ruling today, rejected Treasury Secretary Henry Paulson’s contention that changing the bills to differentiate the denominations would be too expensive.

“A large majority of other currency systems have accommodated the visually impaired, and the secretary does not explain why U.S. currency should be any different,” Judge Judith Rogers wrote for the majority. “The financial costs identified by the secretary are not out of line with the costs of other currency changes the secretary has made”, she said.

U.S. District Judge James Robertson in Washington ruled in 2006 that the same-size paper currency violates the Rehabilitation Act of 1973, which prohibits discrimination based on disability. An inability to identify the value of paper money without help from others leaves blind and sight-impaired people at risk of being cheated, he said.

Of 180 countries that issue paper money, only the U.S. prints bills that are identical in size and, until recently, color for all denominations.

Read Full Bloomberg Article