Gold prices fall on Europe fears

Getty Images/Scott Olson

(CBS/AP) New York - The price of gold and other commodities are falling as doubts about Europe's political and economic future are raising questions about future demand for everything from copper and oil to soybeans.

Metals were hit particularly hard Tuesday as prices dropped for gold, silver, copper, platinum and palladium. Energy and agricultural products were mixed.

The May gold contract on the New York Mercantile Exchange closed today at $1,604 an ounce, down $34.60. The current silver contract on the NYMEX closed at $29.41 an ounce, down 66 cents.

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Investor concerns have intensified after an inconclusive Greek election raised questions about the country's ability to stave off financial disaster.

There could be a ripple effect throughout the global financial system if Greece is unable to remain solvent. Europe is slowing, China's growth has slowed and recent data is offering a mixed view of the U.S. economy. That could cut into demand for commodities.

A stronger dollar is also pressuring commodity prices. Commodities are priced in dollars, and stronger dollar makes them more expensive for buyers who use other currencies like the euro.

In other trading, prices are lower for oil and soybeans. Gasoline futures, wheat, and corn are higher.