Gold pricing: The dollar gives value and the dollar takes it away

NEW YORK (June 3)  Unquestionably dollar strength or weakness plays an extremely critical role in day-to-day price changes of gold. Intrinsically dollar strength or weakness has an exact correlation to price changes in gold. That is because in North America gold prices are paired against the U.S. dollar. Market sentiment that defines whether traders and investors are bidding gold prices higher or lower is always only partially responsible for gold’s net price change.

Yesterday, market participants were aggressive buyers taking the price of spot gold roughly $24 higher. However, dollar strength played a critical role resulting in a net gain in gold of only $9.10.

KITCO