Gold Rises as the Dollar Extended Its Losses

Source:

"The shiny metal is about to end the week inclining after falling in the previous three weeks."

Precious gold surged for the fourth straight day as the U.S. dollar continued its decline versus majors. The shiny metal is about to end the week inclining after falling in the previous three weeks. Spot gold is now traded at $940.80 an ounce recording a high of $942.57. Meanwhile, gold price is facing a strong resistance at this level which represents 38.2% Fibonacci level.

The previous day, gold augmented $6.80 or 0.73% and price was set in London at $937.25 per ounce inclining from $934.25 per ounce during the AM fixing. However, SPDR gold trust, the world's largest exchange-traded fund backed by bullion, slipped to 1,125.74 metric tons on June 25.

Yesterday the metal advanced to $938.88 after the FOMC meeting where the interest rate was left unchanged at the low range between 0%-0.25%, and the FED also announced the continuation of purchasing treasury securities. The low interest rate is reviving the demand on gold as a store of value on the one hand and the quantitative easing methods are giving it support as a hedge against inflation on the other.

Moreover, GDP released in the U.S. yesterday came better than expected; however, jobless claims came in worse. The world's largest economy showed a decline in contraction but still the overall picture of the economy is weak. U.S. stocks the previous day and Asian ones today bounced after the GDP report and the incline in oil and metal prices.

The green currency dropped for the second day heading toward the sharpest weekly decline in one month against the European single currency. The dollar index, a gauge of the dollar's strength versus a basket of major currencies, is now at 80.18 compared with yesterday's closing at 80.37.

Among other precious metals, platinum surged to $1,166.50 from $1,164.50 on Monday; palladium slumped to $242.50 from $243.00; silver slumped to $14.15 from $14.19; and copper inclined to $233.00 from $230.50.

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