The dollar's rebound stalled gold's rally
Precious-Gold dropped on Monday after gains generated last week, since the U.S. dollar rebounded from near its lowest level this year, eroding demand on commodities especially bullions.
Last Friday, gold added $8.70 or 0.87% to close at $1006.00 an ounce. Gold prices were set in London on Friday at $1008.25 an ounce, inclining from $998.25 an ounce during the AM fixing. SPDR gold trust, the world's largest exchange-traded fund backed by bullion, stood at 1,077.63 metric tons on September 11.
The previous week gold advanced 1.13% and managed to close above $1000 an ounce, for the first time since 18 months, on optimism in markets in regards to economic recovery, which boosted demand on higher-yielding and riskier assets; therefore reducing demand on the green currency and giving gold the chance to visit the $1000 levels again this year.
The federal currency lost more than 5% this year, as indicated by the dollar index; which tracks the dollar's movements versus six major currencies. With the ongoing improvement and cheerful outlook on the back of the upbeat data released by major economies, the U.S. dollar and yen retreated as refuge assets. However, the dollar rebounded today on technical movements as it became oversold.
Investors sold the metal as it hit the $1000 to cover their positions, while others took profits after last week's rally. Some analysts are predicting that gold is now taking a breath before rising again above $1000. However, this will depend on the dollar rebound's strength. The U.S. dollar index gained 0.4% today, after dropping for six consecutive days, and it is now at 76.94 compared with the opening at 76.61.
On the other hand, crude oil also fell as the dollar strengthened and stocks fell. Crude oil is now traded at $68.47 a barrel; recording a high of $69.30 and a low of $68.00. The oil's slide dragged prices of the shiny metal with it as it reduced its appeal as an inflation hedge. Spot gold is now traded at $999.98 an ounce recording a high of $1008.80 and a low of $996.55
Moreover, Asian equities dropped on overvalued profits after the recovery signs signaled. MSCI Asia Pacific Index slipped from its highest level in a year; whereas Nikkei Index plummeted 2.3% due to the yen's incline. There have been some concerns, after China's announcements that it will search into the supposed dumping of American and Chicken products. Today, there is no important economic data from major economies; and therefore technical movements more likely to continue.
Precious-Gold dropped on Monday after gains generated last week, since the U.S. dollar rebounded from near its lowest level this year, eroding demand on commodities especially bullions.
Last Friday, gold added $8.70 or 0.87% to close at $1006.00 an ounce. Gold prices were set in London on Friday at $1008.25 an ounce, inclining from $998.25 an ounce during the AM fixing. SPDR gold trust, the world's largest exchange-traded fund backed by bullion, stood at 1,077.63 metric tons on September 11.
The previous week gold advanced 1.13% and managed to close above $1000 an ounce, for the first time since 18 months, on optimism in markets in regards to economic recovery, which boosted demand on higher-yielding and riskier assets; therefore reducing demand on the green currency and giving gold the chance to visit the $1000 levels again this year.
The federal currency lost more than 5% this year, as indicated by the dollar index; which tracks the dollar's movements versus six major currencies. With the ongoing improvement and cheerful outlook on the back of the upbeat data released by major economies, the U.S. dollar and yen retreated as refuge assets. However, the dollar rebounded today on technical movements as it became oversold.
Investors sold the metal as it hit the $1000 to cover their positions, while others took profits after last week's rally. Some analysts are predicting that gold is now taking a breath before rising again above $1000. However, this will depend on the dollar rebound's strength. The U.S. dollar index gained 0.4% today, after dropping for six consecutive days, and it is now at 76.94 compared with the opening at 76.61.
On the other hand, crude oil also fell as the dollar strengthened and stocks fell. Crude oil is now traded at $68.47 a barrel; recording a high of $69.30 and a low of $68.00. The oil's slide dragged prices of the shiny metal with it as it reduced its appeal as an inflation hedge. Spot gold is now traded at $999.98 an ounce recording a high of $1008.80 and a low of $996.55
Moreover, Asian equities dropped on overvalued profits after the recovery signs signaled. MSCI Asia Pacific Index slipped from its highest level in a year; whereas Nikkei Index plummeted 2.3% due to the yen's incline. There have been some concerns, after China's announcements that it will search into the supposed dumping of American and Chicken products. Today, there is no important economic data from major economies; and therefore technical movements more likely to continue.
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