Gold below $1,300 as U.S. dollar strengthens
Duncan Richardson, News Editor
31 Jul 2014, 9:59 a.m.
The gold price fell yesterday as stronger than expected U.S. GDP boosted the U.S. dollar.
U.S. GDP expanded at annualised rate of 4% for Q2 following a disappointing 2.9% contracted in Q1. Following the announcement the U.S. dollar rose against a basket of currencies to a 10 month high and gold price fell back 0.3% to $1,295.20 per ounce.
The dollar rose on expectations that Fed may now raise interest rates soon than expected.
The gold markets are also closely watching events in Gaza and the Ukraine as any further escalation in violence should boost the gold price.
Yesterday Israeli forces bombed Gaza’s only power plant and struck a number of other high profile targets. Egyptian mediators are working hard with both Hamas and Israeli to bring ceasefire to war the torn region.
The European Union and U.S. announced further sanctions on Moscow on Tuesday. The West hopes the new sanctions will increase the pressure on Russian leader Vladimir Putin following the shooting down of Malaysian airline MH17. The West believes Russia has been arming the rebels in the east of the country.
Silver is currently trading at $20.38 per ounce, platinum at $1,476.50 per ounce and palladium at $877 per ounce.