A fall in the gold price occurred today as the dollar gained value and oil prices witnessed a knock down seeing that growth expanded in the US economy.
Gold prices fell profoundly reaching a high of $879.95 an ounce from $902.55 an ounce, losing more than $22.6 an ounce which is surely a great number. This loss in the precious metal was extremely supported by the declining crude and the strengthened dollar. Gold is not visualized as a hedge against inflation no more as the US currency gets stronger; as a result the yellow safe asset is no longer an appeal to investors.
On the other hand oil prices fell intensely recording a high of $126 a barrel; a deep decline of $4 despite a large drop in U.S oil stocks as it was seen in the EIA report released yesterday. This is simply because oil lost its role as a hedge against the falling dollar having a well-built dollar today and consequently having investments swapping from the crude market to the currency market.
The dollar boosted as soon as the US growth was revised to 0.9% from the initial estimate of 0.6 percent. This growth enlarged expectations that the Federal bank will hike interest rates and as a result the dollar gained massively in its value and against majors pulling investors away from oil and gold towards it promising high returns.