GOLD UNDER PRESSURE FROM THE U.S. DOLLAR
Gold continues to feel pressure through mid-day trading moving off the 6-1/2 month high set yesterday. Even news that the Bank of Japan would be launching its own round of monetary easing is not enough to offset the pressure from a strengthening U.S. dollar and investor profit taking. "The general mood is still positive. I think the longer we stall here, the greater the chances of a correction because the U.S. dollar is bouncing back up," Andrey Kryuchenkov, an analyst at VTB Capital, said. "You could see Gold tumble back to $1,720, into that area, and then gradually recover," he said, adding that demand from consumers or central banks would likely materialize around this point to arrest any deeper price slides.
Weak global economic data has sparked a flight to the U.S. dollar and Japanese yen, the perceived “safer” currencies. With new data showing that many economic sectors both in the U.S. and abroad are failing to gain traction, many investors are plowing money into U.S. dollar-denominated bonds. "Global growth worries have returned to the surface. It's weighing once again on investor confidence and giving a boost to both the dollar and yen," said Joe Manimbo, at Western Union Business Solutions in Washington.
At 1 p.m. (EDT), the APMEX Precious Metals spot prices were:
- Gold, $1769.80, Down $0.90.
- Silver, $34.69, Up $0.10.
- Platinum, $1,625.80, Down $15.60.
- Palladium, $661.10, Down $12.10.
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