Headlines
Gold at five-year-low on stronger dollar
Chicago, July 23
Gold futures on the COMEX
division of the New York Mercantile Exchange fell to a five-year-low on
Wednesday as the US dollar strengthened.
The most active gold contract for August delivery fell $12, or 1.09 percent, to settle at $1,091.50 per ounce, reported Xinhua.
The
precious metal was put under pressure as the US Dollar Index rose by
0.3 percent to 97.61 as of 18.09 GMT. The index is a measure of the
dollar against a basket of major currencies. Gold and the dollar
typically move in opposite directions, which means if the dollar goes
up, gold futures will fall as gold, measured by the dollar, becomes more
expensive for investors.
Analysts note that traders' stop-loss
orders put additional pressure on the precious metal and say that gold
remains under pressure due to technical reasons.
The market is
continuing to price in the expectations for an increase in the US
Federal Reserve's interest rate according to analysts. An increase in
the Fed's interest rate drives investors away from gold and towards
assets with a return, as the precious metal bears no interest.
Analysts
originally expected interest rates to rise in June, but due to
weaker-than-expected employment data, expectations were pushed back to
September.