Learn How The Dollar Is Pressuring Gold Bullion Despite Good News Directly At Gold-Bullion.org
February 23, 2010 – Despite good news about demand totals from the fourth quarter of last year, the US dollar continued to pressure gold bullion prices today, with the metal down over $8.00 per ounce in late-afternoon trading. Steady gains by the dollar and news of discount interest rate hikes by the Federal Reserve challenged gold to maintain gains from the previous four weeks, leaving prices at $1,105.00 per ounce near the end of the day.
The World Gold Council reported last week that gold demand climbed by 2.6% in the 4th quarter of last year, signaling a recovery that was attributed largely to increased demand in the investment and jewelry sectors. Gold was also reported to have increased in value by 24% during the year, marking the ninth consecutive year that the metal has experienced an annual gain.
This information was not enough to lift gold prices today, as the dollar continues to post gains against the euro, recording its sixth week-to-week gain against the European currency. “The gold price weakness is mainly induced by the U.S. dollar strength,” stated Bayram Dincer, a commodity analyst at LGT Capital Management. Commodities like gold and oil frequently lose as the dollar gains strength.
For many people, gold bullion can still be a very good investment. While the dollar is holding gold prices down in the United States, the metal is doing better in other countries where the currencies are weaker and gold prices are rising faster. In the US, now is a good time to buy gold as prices are lower. With positive fundamentals in place, gold will likely resume its rise against the dollar, making bullion that is purchased now more valuable as spot prices increase.
