Gold Drops As Yellen Speaks And Putin Calms Markets

Gold futures fell for the second straight day as a rebound by the dollar crimped demand for the precious metal as an alternative asset.

The greenback rose for the first time in four sessions against a basket of 10 currencies. Yesterday, the gauge touched a six-month low. Gold has gained 8.3 percent this year as the dollar dropped 1.5 percent. Federal Reserve Chair Janet Yellen is due to testify today to the Joint Economic Committee of the U.S. Congress.

“The dollar showing some strength is keeping gold down,” David Meger, the director of metal trading at Vision Financial Markets in Chicago, said in a telephone interview. “Investors are waiting on the sidelines before Yellen’s testimony.”

Gold futures for June delivery fell 0.5 percent to $1,302.10 an ounce at 9:39 a.m. on the Comex in New York. Yesterday, the price dropped 0.1 percent. On May 5, the metal reached $1,315.80, the highest in almost three weeks, as escalating turmoil in Ukraine boosted demand for a haven.

via Bloomberg

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza