The stronger dollar has continued to weigh on gold prices

The stronger dollar has continued to weigh on gold prices, however the metal bounced off the $1,074 level on Friday and has since picked up slightly, helped by a weaker dollar this morning. Overall however, the bias looks set to the downside, with prices struggling to gain any upwards momentum. Support levels appear to be $1,064 and $1,050.

While the stronger dollar should continue to weigh on commodity prices, Greece’s problems have seen the yellow metal being pulled in two directions. On one hand, a stronger dollar vis-à-vis the euro should see prices drop further as the metal’s status as a pseudo-currency kicks in. On the other hand however, the metal’s safe-haven status has seen gold outperform the likes of silver, garnering support amid fears over the Greek budget deficit. Overall however, with the EU scheduled to address the Greek budget on Wednesday and looking to create a process of monitoring and implementation, it seems that currency fluctuations will dictate price direction.

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