Gold Dips Due To Dollar Pressure from Global Economic Crisis
Gold prices dipped considerably on July 10, as the growth boosted the dollar rate yet again. Investors were a little apprehensive about the global economic growth and they backed themselves into the American dollar to ensure that they were not affected by the global economic crisis. The high dollar price was the primary cause for drop in the gold prices, after the metal saw a fluctuating week in terms of prices. First it hit an 8-month low and then had a bull run as investors looked to maintain their finances.
Dollar Continues Its Bull Run
The dollar looked in good shape for a bull run as it almost reached the one month high at the start of this week, while the euro continued its disastrous run and was headed for an all time low for a period of two years against the US dollar. This was seen as a consequence of some disturbing market data released by China, which showed that the world’s second largest economy was not as stable as it was expected to be. The data highlighted the fact that the imports were lower than they were expected to be, indicating that the local demand in China might not be as high as the others thought it would be.
Import Data From China Not So Encouraging
This data came a day after numbers showed that inflation in China is not as high as it was predicted to be and the inflation rate had slowed down a little since the beginning of June. This allowed the Central Bank to ease up a little on its financial policy and help in stimulating a modicum of growth without having to increase the pressure for price hikes.
The prices of spot gold dipped to $1,585.15 per ounce. This is a decrease of $1.50 compared to the earlier prices. This dip in price was recorded at 0620 GMT. For the month of August, the United States gold futures came down to $1,585.30. This was a decrease of 0.2 percent compared to the earlier prices. There is an inverse correlation between dollar and gold prices. That is, if dollar falls, gold rises and if gold falls dollar rises. Experts predict a further dip in the prices in the future.