World gold price nears 6-year low on stronger dollar
Gold was trading near its lowest in nearly six years on Thursday, as the dollar held at multi-month highs after US economic data reinforced expectations of an interest rate rise this year.business Updated: Nov 27, 2015 02:04 IST
Gold was trading near its lowest in nearly six years on Thursday, as the dollar held at multi-month highs after US economic data reinforced expectations of an interest rate rise this year.
The US currency was also supported against the euro, weighing on dollar-denominated gold, as European Central Bank officials said they were considering options such as whether to stagger charges on banks hoarding cash or to buy more debt. The ECB meets next week.
Spot gold was up 0.2 at $1,072.86 an ounce, not far off $1,064.95 hit last week, the lowest since February 2010.
“The sense in the market is that the dollar will continue to rally due to the prospect for QE in Europe and the hike in the US,” said Ole Hansen, head of commodity strategy, Saxo Bank. “The focus is back to the negative correlation to a stronger dollar and that’s keeping gold under pressure.”
The dollar rose 0.1% against a basket of major currencies, trading close to an eight-month high reached in the previous session.
“We are keeping an eye on the dollar as a possible catalyst (for gold),” ScotiaMocatta said in a note. “The dollar index is within reach of the multi-year high of 100.39. A break of this level would put downside pressure on gold with a break of $1,066 yielding ... $1,045,” it added.