Precious-Gold rises from 7-week low as the dollar fell
The precious metal continued its rise on Thursday in Asia in thin trading ahead of the yearend holidays as the dollar dropped from its highest level in 3 months versus a basket of major currencies, increasing demand on gold and other precious metals as alternative investments.
Yesterday, gold advanced $3.90 or 0.36% to close at $1087.40 an ounce as the U.S. dollar stopped its gains after touching the highest level in more than 90 days against six major currencies as indicated by the dollar index, which slid today to 77.75 compared with Wednesday's closing at 77.88, after U.S. new home sales fell to 7-month low in November.
Meanwhile, gold is getting its direction from the dollar which rebounded since the release of the NFP report in the U.S. earlier this month. It seems that the FED will not scale back emergency measures at the beginning of the new year as the economy still needs to gather more strength for full recovery.
Gold Price was setin London on Wednesday at $1085.25 per ounce declining from $1085.50 per ounce during the AM fixing. SPDR gold trust, the world's largest exchange-traded fund backed by bullion, remained at 1,132.70 metric tons on December 23.
Furthermore, Stocks rallied in Asia to the highest in three weeks, lifted by Nikkei index which closed at 3-month high taking advantage of the yen's drop. Later on today, U.S. jobless claims and durable goods will be due and thereby markets may be impacted by the news in the absence of data from Europe.
Among other commodities, oil jumped to $76.90 after the decline in U.S. stockpiles as seen by the EIA report released on Wednesday. The rebound in crude prices gave another impetus to gold which is expected to either rise with oil on recovery signs or fall as the dollar gains boosted by strong U.S. data.
Currently, spot gold is traded at $1101.85 an ounce recording a high of $1104.94 and a low of $1086.25.