Gold prices decline amid rising U.S. dollar
The precious metal eased their gains for the second day as the federal currency is climbing versus major currencies therefore dampening the demand on gold as an alternative investment.
Yesterday; gold shed $11.00 or 0.99% to close at $1096.62 an ounce. Gold prices were set in London on Tuesday at $1106.00 per ounce, declining from $1103.00 per ounce during the AM fixing.
The dollar gained ground versus major currencies, as a result of the U.S. economy releasing its consumer confidence showing that in December it rose to 52.9 from the upwards revision of 50.6, although it is worse than the projected 53.0, but the rising confidence meant that consumers are looking forward to the outlook of the economy.
With increasing slight recovery signs, gold prices tend to decline since investors are no longer interested in gold as a safe-haven. The Dollar Index, a measure of the dollar against a basket of six currencies, is climbing and this is weighing on gold prices, since it is an alternative investment for a strong dollar as it is currently traded at 77.92 while recording a high of 78.07 and a low of 77.80.
Now looking at Asian stock markets, we see they are falling for the first time this week as Japan Airlines and Asiana Airlines fell in trading due to worries regarding debt, while the lower gold prices, further weighed on commodity producer stocks.
Among other precious metals; platinum is traded at $1460.90; palladium at $386.50; silver at $16.94; while, copper is at $333.88. Turning to commodity futures we see yesterday, S&P GSCI closed at 523.78 points recording a high of 527.20 points and a low of 520.88 points while RJ/CRB Commodity closed at 283.73 points recording a high of 285.37 points and a low of 282.68.
Turning to oil, we see that they were held from rising as a result of the American Petroleum Institute (API) releasing its inventories showing that in the U.S., the biggest oil consumer, inventories climbed last week 1.725 million barrels. Investors are focusing on the EIA report to be released on today with expectations showing inventories will decline 1.7 million barrels.
Currently, spot gold is traded at $1091.25 an ounce recording a high of $1098.00 an ounce and a low of $1089.75 an ounce.