Gold down to 16 week low
Duncan Richardson, News Editor
29 May 2014, 10:56 a.m.
The gold price fell to a 16 week low yesterday as the dollar rallied and gold demand in China soften. The global spot price fell to $1,251.70 per ounce as the U.S. dollar touched a two month high against a benchmark of leading currencies.
A strong dollar makes buying gold in other currencies more expensive, whilst a strong equity market reduces gold’s appeal as a hedge against inflation and systemic risk.
Traders and analysts are closely watching the political situation in the Ukraine closely as any escalation in tensions will increase gold’s appeal as the ultimate safe haven asset.
Revised U.S. Q1 GDP figures will be published later today with economists expecting the data to show that the U.S. economy contracted by 0.5% instead of the 0.1% growth that was originally reported.
Silver dropped 0.2% to $18.85 per ounce, platinum increased 0.2% to $1,454.78 per ounce and Palladium was little unchanged at $836.76 per ounce.
The ongoing labour strike in South Africa’s platinum mines is set to be resolved after mines minister Ngoako Ramathodi declared both parties have comprised over wage demands.