Gold price gains as dollar index falls for third consecutive day
Johannesburg-South Africa (Apr 17) Gold lifted past the $1,200 technical level once again on Friday, as the dollar lost ground against other major currencies for the third consecutive day.
The dollar index, a measure of the value of the greenback relative to the majority of its most significant trading partners, was down 0.51% at 12.09pm on Friday.
Spot gold was up 0.59% to $1,205.40 per fine ounce.
Gold is generally quoted in US dollars per ounce of gold, so any fluctuations in the strength of the dollar are likely to be reflected in the dollar price of gold.
When the dollar falls the gold price rises and when the dollar rises gold falls.
Rand Merchant Bank analyst John Cairns said dollar performance on Friday would depend on the inflation reading from that economy.
The US consumer price index (CPI) figures for March may prop up the greenback should inflation be higher than expected.
"US CPI holds the biggest risk. A read below the expected 0.0% y/y would feed into the story of weakness in the US economy and delayed Federal Reserve rate hikes... The University of Michigan Consumer Confidence Index is also due in the afternoon. Yesterday’s data certainly didn’t do anything to dispel concerns over weakness: housing starts dropped by the biggest amount in a year in March," said Mr Cairns.
Jitters over the future of Greece have also sparked a hunt for assets deemed safest during times of volatility over recent days. Greece’s international creditors this week signaled that they are losing hope that Athens will do what is needed to unlock bailout funds before it runs out of money, Dow Jones Newswires reported.
A deal had been pencilled in for an April 24 meeting of eurozone finance ministers in Riga, but it now seems too ambitious, officials said.
That has raised fears the Greek government will not be able to make its next payments to the International Monetary Fund (IMF), which total some $1 billion over the next month.
Missing an IMF payment could mean default and, eventually, an exit from the eurozone.
Source: bdLive.za
