For Gold, It's All About The Dollar
London (Nov 11) Gold prices moved higher in the late European morning, though trading volumes were down due to the U.S. Armistice Day holiday.
The strengthening dollar continues to be the main driver for the gold market. The U.S. currency took a brief respite against most other major currencies on Tuesday, giving back some early morning gains and allowing gold to recover.
The greenback is being lifted by broad optimism about the economy and the possibility that the Fed is likely to be the first major central bank to raise interest rates.
"It is still all about the dollar," said David Govett, head of precious metals at Marex Spectron. He recommended selling gold if there are any meaningful rallies.
According to analysts at Commerzbank, gold's losses to the dollar are being compounded by ongoing outflows from the gold exchange-tradeD funds. "Their holdings were reduced by a further 1.9 tons" Monday after last week logged the largest weekly outflow of 2014, according to the analysts.
Spot gold was trading up 0.4% at $1,156.22 a troy ounce in morning European trade.
The rest of the precious metals were also higher. Silver was up 0.1% at $15.610 an ounce, platinum was 0.2% higher at $1,193.90 an ounce, and palladium was up 0.1% at $759.10 an ounce.
Source: NASDAQ.com