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Gold Prices Pressured By Dollar Strength

Commentaries & Views

Strong upside gains in the dollar index added pressure to the precious metals market today, with the exception of platinum. Currently the dollar index is up .53% (+0.503 points), and fixed at 96.275.

Dollar strength is the main catalyst for lower pricing in gold today. According to the KGX (Kitco gold index) market participants bid spot gold higher today resulting in gains of $4.50. However, after factoring in dollar strength which took away $7.30 worth of value, spot gold as of 4:16 PM Eastern standard time is currently trading down by $2.80, and fixed at $1279.50.

Gold futures are also experiencing lower pricing today with the April 2019 Comex contract currently fixed at $1285, a net decline of $5.20 on the day.

World Economic Forum Experts Warn of an Economic Slowdown in the U.S

Financial experts debated the economic outlook for the United States at the World Economic Forum Annual Meeting at Davos, Switzerland today.

They warned that the US economy could slow down to a crawl. This warning suggests that there is a serious risk that the US economy will experience zero growth. These concerns are based upon the current government shutdown, the trade war between the United States and China, as well as issues for a workable resolution to Brexit.

Kenneth Rogoff, Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard University said, “The shutdown, if it continues, will be very problematic. The estimate of zero growth is not crazy at all,”

Goldman’s Commodities Chief Bullish on Gold

As reported by MarketWatch today, “In an interview Goldman Sachs’s head of commodities research, David Currie, laid out their three reasons for a bullish view: fear of recessionary risks still make it a good hedge against those possible economic problems; a weak dollar improves the purchasing power of emerging markets, with China and India expected to fuel even more physical demand; and signs of more central-bank buying, from India, China and emerging markets. Goldman has a 12-month gold forecast of $1,425 an ounce, which is also a fair pace from the current $1,278.40 level”.

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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.