Gold Ends Weaker As U.S. Dollar Shows Powerful Rebound

(Kitco News) - Gold prices ended the U.S. day session moderately lower Monday as a solid rally in the U.S. dollar index the past week has the precious metals markets once again on the defensive. June Comex gold was last down $4.90 at $1,199.70 an ounce. May Comex silver was last down $0.082 at $16.30 an ounce.

Focus of the market place is back on the currency markets, after the U.S. dollar index has made a very strong rebound from recent selling pressure and hit a four-week high Monday. The recent near-term technical damage that had hinted of a market top has all been repaired and new for-the-move highs are now in the cards in the near term. Meantime, the Euro currency is slumping again and is moving in on its recent 12-year low. These currency movements are bearish for the raw commodity sector, including the precious metals, as most raw commodities are priced in U.S. dollars on the world markets. The stronger greenback makes those commodities more expensive to purchase with other world currencies.

The other key “outside market” saw crude oil prices modestly higher Monday. Trading has turned choppy in crude oil recently. However, Nymex crude oil futures prices are still in a three-week-old uptrend on the daily bar chart.

In overnight news, there was downbeat economic news coming out of China Monday, as its exports were down 15% in March, while its imports declined by 12.7%, year-on-year. This news is a bearish underlying factor for the raw commodity markets, as the world’s largest population and second-largest economy is major raw commodity consumer and importer. Traders and investors will be closely examining China’s gross domestic product report for the first quarter, due out later this week.

There was no major U.S. economic data due for release Monday.

The London P.M. gold fix is $1,198.90 versus the previous A.M. fixing of $1,197.85.

Courtesy: Kitco News