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Gold retreats on dollar gain; settles near $1,305

July 23, 2014

New York (July 23)  Gold ended the trading session lower on Wednesday, pressured by firmer stock markets after positive U.S. data and corporate earnings, but the metal was underpinned by simmering conflict in Ukraine and the Middle East.

Sluggish physical demand in Asia in the seasonally quiet summer period is also weakening support for any price rally.

Other than seasonality, the possibility of a further drop in prices due to an improving U.S. economic outlook and stronger dollar is also keeping buyers away, dealers said.

U.S. gold futures ended $1.60 lower at $1,304.70 an ounce and spot gold was last down 0.2 percent at $1,304 an ounce, after losing 0.4 percent in the previous session, pressured by firmer equities. The dollar rose 0.4 percent against a basket of major currencies. 

A Reuters poll on Tuesday showed that analysts and traders expected gold prices to average $1,277 for the full year, as U.S. monetary policy returns to normal and Asian demand is weak.


Demand in Asia, home to major buyers China and India, has fallen off sharply after strong purchases last year, when gold prices slumped 28 percent.

Other than seasonality and above-normal purchases in 2013, the possibility of a further drop in prices is also keeping buyers away, dealers said.

Source: Reuters

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