Dollar lower and gold higher

The gold price traded slightly lower Tuesday, falling $2.00 to $1,718 per ounce. Gold prices declined alongside the broader stock and commodity markets after the International Monetary Fund (IMF) warned that China’s 2012 gross domestic product could be cut in half to 4.25% from the current 8.5% projection if weakness in the global economy persists.

The gold price began the week by retreating $5.87, or 0.3%, to $1,720 per ounce on Monday.  Strength in the U.S. dollar helped to pressure the price of gold, which posted its first three-session losing streak since mid-December.  The gold price fell to as low as $1,710.60 per ounce but pared its losses later in the day.  The SPDR Gold Trust (GLD), the largest gold ETF and gold price proxy, settled lower by $0.46 at $167.18 per share.

However, the U.S. dollar turned lower and gold futures rebounded after Federal Reserve Chairman Ben Bernanke testified on the outlook for the economy before the Senate Budget Committee Tuesday morning.
There, Bernanke provided the identical testimony as he gave last week to the House of Representatives Budget Committee, which Gold Alert discussed at that time.

More importantly for today, however, was the fact that the Fed Chairman did not comment on last Friday’s better than expected non-farm payroll report – which was announced after last week’s testimony.  The encouraging jobs data stood in stark contrast to the gloomy economic picture depicted by the Fed at last month’s FOMC meeting – where the central bank decided to extend the timeframe for its zero interest rate policy from mid-2013 to late-2014.

As such, the fact that Bernanke did not discuss the employment report served to reinforce his dovish monetary policy stance, and thus helped to send the dollar lower and gold higher.


Related Posts Plugin for WordPress, Blogger...

KLSE Info Zone

About This Blog

Malaysia Gold Investment

I found Gold Investment in Malaysia is a vary good tools to make profit when the market is down. I also found that Gold Price go up and down more slower compare to share market so to make money in long term, Gold is the right tools. This blog is all about Malaysia Gold Info and the way to make profi

Blog Malaysia


  © Free Blogger Templates 'Greenery' by Ourblogtemplates.com 2008

Back to TOP