Gold Drops from Two-Week High Dollar Rebounds

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Gold Drops from Two-Week High Dollar Rebounds

Gold futures declined from their two-week high while signs for a stronger US economy boosted the dollar.

Bullion is still expected to advance amid Europe and China growth concerns.

According to Bloomberg, Gold dropped 8.4% last quarter after signs of US recovery pushed the dollar to its largest gain in six years.

The metal rallied the highest in two months after the Federal Reserve policy makers said that global economic slowdown poses risks to the US, sparking fresh speculations that the central bank will keep the interest rates lower for longer.

Optionsellers.com founder, James Cordier said, “The dollar is much stronger today, and gold is consolidating its gains.”

December delivery gold futures dropped 0.4% to $1,200 per ounce on the Comex in New York. The prices reached $1,234 yesterday, the highest level from September 23. The commodity dropped to $1,183.30 on October 3 in New York, the lowest level from December 31.

Market Watch quoted Jim Wyckoff as having written at Kitco, “Safe-haven demand for the yellow metal is being met with bearish ‘outside markets”- a firmer US dollar index and lower crude oil prices to keep gold prices from straying too far from unchanged.”

On Thursday, gold jumped while US stocks tumbled amid investors’ concerns on global growth.

The dollar gained, with the ICE dollar index +0.315 per measure of the currency against the basket of currencies, climbing 0.4%. The stronger dollar could weigh on commodities priced in the unit, making them expensive to traders using other currencies.

December delivery silver futures dropped 1% to $17.245 per ounce on the Comex. The metal is on track to its first weekly gain in six weeks.

January delivery platinum futures dropped 1.5% on the New York Mercantile Exchange to $1,258.80 per ounce. December delivery palladium futures dropped 1.8% to $785.980 per ounce.

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To contact the reporter of the story: Jonathan Millet at john@forexminute.com