Gold Gains as U.S. Dollar Falls
Posted on April 16, 2008 in the Commentary category
.Gold features finished a tad higher on Monday, as the weak U.S. Dollar underpinned the demand for the metal. Gold for a June delivery rose $1.70 to end at $928.70 for an ounce of gold on the New York Mercantile Exchange. Gold gave up a majority of its early gains while the Dollar pared its losses. On Monday gold reached a high of $934.50.
Mark O’Byrne, executive director at Gold and Silver Investments Ltd, recently stated in a research not that, “Gold is stronger as the dollar has weakened, despite leaders of the G7 (Group of Seven) and IMF (International Monetary Fund) governing council saying they would do all in their powers to provide market stability. Continuing worries about the health of the international financial sector has led to declines in stock markets internationally and renewed risk aversion.”
The Dollar pared losses but still remained lower against most other counterparts, as there have been fears about the U.S. economy, since than a positive forecast of retail sales data did not keep worries about the Dollar at bay.
Other Economic News
Retail sales in the U.S. did improve in march and rose 0.2% in the month. Excluding gas and automobiles, sales rose only 0.1%. This according to the U.S. Commerce Department. Economic experts expected that there would be a 0.1% drop in sales, while the rise in sales, without automobiles, was in line with their expectations.
The Dollar did not receive lasting support from concern from the (G7) about the volatility in the foreign exchange markets. The lack of warning about the weakness of the Dollar and no means for meaningful expectations did not offer much prospect that the Dollar would end its decline against the Euro.
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