Gold Near Steady; Stronger U.S. Dollar Limits Buying Interest

New York (Aug 25)  Gold prices are trading near steady in early U.S. dealings Monday. The recent strength of the U.S. dollar against the other major currencies is a bearish weight on gold. However, still-simmering world geopolitical hotspots are prompting a bit of safe-haven demand for the metal. December Comex gold was last up $0.90 at $1,281.20 an ounce. Spot gold was last quoted down $1.00 at $1,280.25. December Comex silver last traded up $0.081 at $19.54 an ounce.

The U.S. dollar index hit an 11-month high and the Euro currency sunk to an 11-month low overnight, following remarks from European Central Bank president Mario Draghi, who on Friday in Jackson Hole, Wyoming, sounded very dovish commentary on ECB monetary policy. Draghi’s comments suggest the ECB will initiate further monetary stimulus measures, including quantitative easing, in the coming months, or sooner. Fed Chair Janet Yellen also spoke in Jackson Hole on Friday, but the market place deemed her remarks more balanced, regarding U.S. monetary policy.

In other overnight news, the August German Ifo consumer confidence survey came in at a reading of 106.3 versus expectations for a reading of 107.0. The downbeat report is yet another sign the European Union economy has slipped back into recession and is another sign of more monetary policy stimulus coming from the ECB soon.

There are still geopolitical matters that have the attention of the market place. U.S. military action in Iraq and the rise of the ISIS fighters in the region is a big worry for Western powers. Russia-Ukraine tensions and the fighting on the Gaza strip are also in the background.

 U.S. economic data due for release Monday includes the Chicago Fed national activity index, the U.S. flash services PMI, new residential sales, and the Texas manufacturing outlook survey.

Source: KitcoNews