(Reuters) – Stronger U.S. pressured gold to its lowest for the week on Tuesday, cancelling gains of the metals from the political tension over Ukraine.
The US dollar rose to hit 7-month high verses Japanese Yen and 1-year high verses Euro as suspicions of Western sanctions on Russia increased. Moreover, the U.S. non-farm payrolls and the ECB (European Central Bank) meeting this week added pressure on gold price and span worries of prices might fall even lower for the next few sessions.
Gold price in the spot market fell 1.23% for the day to $1,267.70 per troy ounce, which is 1.76% weaker than last month. Gold bullion traders expect gold price to stay within the tight range between $1,278 and $1,290 per ounce until ECB meeting conclusion on Thursday for clues on economic reformation in the Europe.
As it was for the past years, the U.S. dollar is a direct player in gold price movement, and its strength or weakness foreshadows gold price’s trend. The U.S. dollar gained from euro’s delayed recovery and decreasing inflation rate plus the increasing possibility of policy and the Ukraine crisis which pushed euro lower.
The President of Ukraine, Petro Poroshenko, accused Russia of direct aggression which unbalanced the power in Kiev and weakened their position against pro-Moscow separatists, as he described.
Gold traders still waits for non-farm payrolls and weekly unemployment reports due to be released on Friday to measure U.S. economic recovery and the reaction of the Federal Reserve.