The rebound of dollar weakens gold prices
Gold prices today eased their gains, as the federal currency is climbing versus major currencies on anticipations that lower lending from Chinese banks will hurt economic growth in the world's third largest nation, therefore as the dollar rose, dampened demand on gold as an alternative investment.
When there are worries in the markets, investors tend to turn away from higher yielding assets and more towards lower yielding assets, which therefore boosts the dollar in the markets against major currencies.
Thursday, gold climbed $4.40 or 0.39% to close at $1142.55 an ounce as the dollar lost strength six major currencies which are measured by the Dollar Index, declined yesterday to close at 76.77 while recording a high of 77.01 and a low of 76.67.
Among other precious metals; platinum is traded at $1601.40; palladium at $448.50, as it marked an 18-month high; silver at $18.48; while, copper is at $337.55. Turning to commodity futures we see yesterday, S&P GSCI closed at 527.72 points recording a high of 532.28 points and a low of 525.07 points while RJ/CRB Commodity closed at 284.43 points recording a high of 285.82 points and a low of 283.46.
SPDR gold trust, the largest exchange-traded fund backed by bullion in the world, fell 0.2 percent standing at 1,113.75 metric tons. Gold was set in London on Thursday at $1138.25 per ounce inclining from $1137.50 per ounce during the AM fixing.
In addition, stocks in Asia climbed as a result of higher finance and technology company stocks boosting the Asian stock market after Commonwealth Bank, the biggest lender in Asia, saying that first-half unaudited cash earnings climbed. Also Intel projected first-quarter revenues that beat market expectations, were all reasons that helped stock market add points.
Furthermore, we see that prices extended their decline after the world's biggest crude consumer, the U.S. economy released its retail sales showing that they fell in December despite it being a holiday season where a lot of shopping usually takes place, but since they are weak, this supports the fact that demand is dampened. Also demand is crippled as a result of the fragile job market while yesterday we saw that jobless claims also rose in the U.S., meaning that future oil demand would be weak, which weighed on oil prices.
Currently, spot gold is traded at $1135.50 an ounce recording a high of $1145.75 an ounce and a low of $1133.44 an ounce.