Gold prices have fallen to a two-and-a-half month low following a strong showing from the US dollar.
December gold futures dropped 1.14 per cent to $1,272.6 (£772.53) on the New York Mercantile Exchange (NYMEX) as of 12:39 BST on Tuesday (September 2nd). This came as a slight recovery to the $1,268.5 it had fallen to earlier in the day, representing the lowest figure since June 18th.
Gold prices have been affected by the strong performance of the US dollar in recent days. As gold declines the ICE US Dollar Index had increased 0.23 per cent to 82.97, a slight drop in its two month peak of 83. It had not reached this level since July 18th, 2013 but was making its seventh consecutive weekly gain. The dollar index's 14-day relative-strength index (RSI) has also remained strong, staying about 70 since August 19th.
It has been a turbulent time for gold prices of late, as it has been constantly declining throughout the month of August. On August 25th it had dropped 0.3 per cent to $1,277.19 but there had been interest from the Asian markets with jewellery buyers being attracted by the drop in bullion price.
Tensions in Ukraine have been cited as another factor in gold's poor performance. There has been an escalation in conflict between Ukraine and pro-Russian separatists with Nato accusing Russia of sending troops over the border to fight, something which the Kremlin strongly denies.
Speaking to Reuters, a Hong Kong-based bullion trader said: "It does seem like gold is struggling. Ukraine tensions remain unresolved and yet gold is below $1,300 […] People are concerned about the dollar strength and I think we will trade in a tight range between $1,278 and $1,290 until we get European Central Bank and non-farm payrolls out of the way."
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