Gold slumps affected by the dollar
Gold declined today in the Asian session, where gold is mainly affected by the strengthening dollar, which is forcing pressures on commodities to trade lower, in addition to the downbeat warning by Standard and Poor's counting the participation of the private sector in bailing out Greece as an effective default.
Spot gold declined after the opening of $1495.70 per ounce, recording the high of $1498.00 and the low of $1493.00 and is currently trading around $1493.20 per ounce.
The dollar inclined recovering the losses recorded in the past week, affected by the weakening common currency, the euro, which slumped after the downbeat data from Standard and Poor's, that warned of the participation of the private sector under the French proposal could still count as an effective default or as selective default for Greece.
The shiny metal was affected by the dollar, which forced gold to step aside to be an alternative investment for traders as the low yielding currency is pulling the demand as a safe haven, while uncertainty and volatility is dominating the markets.
Moreover, the downbeat PMI manufacturing data in the zone has assured the slowing pace of growth in the zone, as investors are awaiting today for the PMI services data, which is expected to confirm the slowing pace of growth precisely in the zone and in the world in general.
In England, the PMI services is closely watched and critical because services sector is the biggest portion in the British economy, but still, the index is expected to show slowing growth, forcing more pressures on the BoE to come up with a solution regarding the current situation. Slowing growth is preventing the BoE from acting on inflation that stood at 4.5% in May, and accordingly the inflation hedge appeal for gold is more likely to rise as the BoE and other central banks continue to keep their monetary policies steady.
The dollar index is currently trading around 74.55 after the opening of 74.25, recording the high of 74.57 and the low of 74.20.
Among other precious metals, silver declined slightly to trade currently around $33.85 per ounce after the opening of $33.95, recording the high of $34.29 and the low of $33.84 per ounce.
Platinum is trading within narrow levels, to currently record the high of $1723.00 per ounce after slumping to the low of $1720.00.