Gold dipped for the first time in three days in London amid rising values of the U.S dollar and after sales by some investors who made the maximum profits on bullion given its record rally up until yesterday.
The dollar has risen by at least 0.5 percentage points against the euro today and this has impacted the value of gold in international markets. Gold shares an inversely proportional relationship with the greenback and it reached a record $1,364.77 an ounce on Oct. 7, when the dollar started slumping. Bullion’s strong prices have caused an up tick in the relative strength index above 70, which is representative of mixed signals for the economic recovery.
Immediate-delivery bullion dropped $9.05, or 0.7 percent, to a new low of $1,345 an ounce at 9:01 a.m. in London. Gold for December delivery dipped 0.7 percent at $1,345.50 an ounce on the Comex index in New York.
Analysts say the dollar rally will impact gold prices as investors are looking for other alternatives to make profits. They are also of the opinion that prices will again surge after corrective drops as the global economic outlook remains troublesome.
Gold has seen a consistent surge this year, which is estimated to be around 23 percent, in what is considered as the continuous annual rally for the last 10 years. It is the first time since 1920 that gold has seen a maximum boost in profits. No other investment outfit has stayed close to gold as global equities, Treasuries and most industrial metals have seen great fluctuations in recent years.
