Dollar’s Impact Effects Gold Prices

Gold price technical analysis 7 - June 2013

Gold is running below on Tuesday, due to China being still in holidays and the strength of the USD VS the euro. Gold dropped 0.2% to $1,472.26. On Monday gold increased around 1% due to the traders expectations that the Fed will continue its bond buying without change at $85 billion per month. June’s U.S. gold delivery increased by 0.3% to $1,471.70  USD/Ounce.

Michael Widmer, an analyst at Bank of America Merrill Lynch, stated “There has been a bit of short-covering rally after the price sell-off in mid-April and to some extent that rally is now subsiding,”

Gold prices dropped to their lowest since two years to reach $1,321.35 on April 16 , that led to a lot of selling which shocked investors.

European shares increased and USD also rose against the euro, which led investors head for the US Federal Open Market Committee (FOMC).

New York’s SPDR Gold Trust, the biggest gold-backed exchanged –traded fund (ETF), stated that it reached the lowest since September 2009, on Monday the holdings dropped 0.22% to $1,080.64 tons. The fund’s holdings reached a monthly decline of 11.5%.

The physical buying is still weak due to China’s holidays. Purchasing of gold coins, gold bars and nuggets are still in a good position in Asia. While Hong Kong, gold bars reached a high level of $3 an ounce since October 2011, which led to a pinch in London prices this week.

Silver dropped 0.7% to $24.33 an ounce. Palladium didn’t change at $692.72 USD/Ounce, on the other hand Platinum as increased by 0.2% reaching $1,508.49 an ounce.