Gold declines as the dollar strengthens
The shiny metal slid for the second day as the dollar advanced against majors, thereby reducing demand on the metal as an alternative investment.
Yesterday, gold shed $4.10 or 0.37% to close at $1109.60 an ounce. Gold Price was setin London on Wednesday at $1115.25 per ounce during the PM fixing declining from $1118.50 at the AM fixing. SPDR gold trust, the world's largest exchange-traded fund backed by bullion, slipped 1.58 metric tons to 1,110.34 metric tons on February 3.
The shiny metal is negatively impacted by the dollar's rally that started in December. The improved U.S. data and outlook for the U.S. economy are endorsing the Federal currency. The dollar index, a gauge of the dollar movements versus a basket of major currencies, surged to 79.63 from the day's opening at 79.41.
Meanwhile, the greenback is traded near its highest level in seven months versus the 16-nation currency as debt woes in European economies are raising concerns and thereby weighing on the euro. However, the dollar's direction may be determined largely after the non-farm payrolls report due tomorrow.
Moreover, the dollar's rally adversely affected all dollar-denominated commodities. S&P GSCI added 2.73 points to 501.39 and RJ/CRB Commodity pushed up 2.61 points to 270.58 the previous day, whereas crude oil declined to near $76.17 a barrel from $76.97 in the preceding day's closing.
Spot gold inclined to $1102.80 an ounce today, recording a high of $1111.10 and a low of $1102.75. The yellow metal is facing resistance at $1113.00 while gaining support at $1100.00.
With regard to other precious metals, platinum edged down to $1541.40 from the opening at $1559.40, whereas palladium plunged to $427.00 from $432.70.