Gold Declines on Firmer DollarPrecious-Gold slipped for the second day, paring some of its weekly advance, as the U.S. dollar strengthened which reduced that appeal of the metal as an alternative investment.
Yesterday, gold shed $11.00 or 0.98% to close at $1106.55 an ounce. Gold Price was setin London on Wednesday at $1019.00 per ounce during the PM fixing inclining from $1118 25 during the AM fixing. SPDR gold trust, the world's largest exchange-traded fund backed by bullion, stood at to 1,106.37 metric tons on February 17.
Spot gold is traded at $1100.66 an ounce, a little bit above strong resistance at $1100.00, after recording a high of $1109.15 and a low of $1097.66. The shiny metal dropped suddenly the previous day after the IMF mentioned it would sell gold in open market to generate additional sources for lending. IMF announced in September it is planning to sell 13% of its gold reserves; thus the IMF's intension was known previously which shows that the dollar's rebound accelerated the fall.
The dollar index, which tracks the dollar movements against a basket of major currencies, bounced for the second day to 80.63, reaching the highest in 9 months versus the euro, after breaching strong support at 80.07 which reduced demand on all dollar-denominated commodities.
The greenback probably will continue its rally that started since December on improved outlook for the U.S. which is increasing speculations the FED would raise interest rate faster than other Central Banks. Production and housing data released yesterday beat estimates ahead of the release of other important U.S. data later on today which are expected to show further progress. On the other hand, investors are wary of buying the euro on concerns the European Central Bank will need to raise money for supporting Greece.
With regard to other precious metals, platinum edged down to $1506.50 from the opening at $1508.00; palladium inclined to $425.50 from $427.50; and silver remained unchanged at to $15.75.