Gold Retreats as USD Recovers

Gold slipped on Wednesday from the previous day’s six-week peak as the dollar rose to a one-week high against the euro and on signs of softening physical demand.

Prices were supported at the lower levels however by worries over the global economic outlook, heightened this week after China said third-quarter growth was the slowest since 2009. That had lifted appetite for counter-cyclical assets such as gold.

Spot gold was down 0.3 percent at $1,244.85 an ounce, while U.S. gold futures for December delivery were down $6.50 an ounce at $1,245.20. On Tuesday gold rose to its highest since Sept. 10 at $1,255.20 an ounce.

“A lot of buying went through yesterday despite a lower euro, but gold failed to (decisively) breach the $1,255 level. I think we may see a correction today lower,” said Afshin Nabavi, head of trading at MKS in Switzerland.

“India, Malaysia and Singapore are closed for holidays, and also with the U.S. dollar strengthening, gold is coming off,” he added.

via CNBC

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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