Gold drops from record high after the kill of Bin Laden newsPrecious gold fell from record high on Monday trading after the news of the kill of al-Qaeda leader Osama Bin Laden by US forces in Pakistan which boosted shares and the dollar and lowered demand on gold.
Markets interpreted the news positively as the world got rid of the most wanted man who was behind the September 11 attack that resulted in the kill of nearly 3,000 people, yet any reply from al-Qaeda by attacking one of the US embassies for instance may cause instability in markets.
The previous session, gold added $29.90 or 1.95% reaching a high of $1569.25, while gold price was setin London at $1535.00 per ounce inclining from $1531.00 during the AM fixing.
Spot gold is trading at $1553.70 an ounce after recording all-time high of $1575.62 and a low of $1539.85.
Last week, gold recorded the highest monthly advance since November 2009 as the weak dollar enhanced demand on the metal as a store of value and alternative investment.
Yet, after Bin Laden's death news the US dollar managed to rebound against a basket of major currencies, as depicted by the dollar index which rose to a high of 73.28 compared with the day's opening level of 72.99.
Despite the dollar's advance today, its outlook is still bearish after the Fed had left its monetary policy lose last week and Bernanke pledged to keep it unchanged to enhance growth, while US annualized GDP for the first quarter cooled down to 1.8% compared with the 3.1% expansion recorded in the fourth quarter, adding to the dollar's fall where it was traded near the lowest level in 17 months against the euro last week.
Today, gold did not take advantage of the drop in China's manufacturing which provided evidence that the government's tightening is affecting growth. Yet, it may rebound if manufacturing data from the euro zone and the United States dropped also.
With regard oil prices, it also slipped from 31-month high to touch a low of $112.02 a barrel from the day's starting level of $113.75.
Among other precious metals, platinum rose to $1848.50 from the day's opening of $1834.70, palladium soared to $779.00 from $777.50 and silver advanced to $44.55 from $43.96, as of 07:35 GMT.