The price of gold looks to be heading lower for the seventh day in a row, while European stocks have also inched downwards in morning trading today (May 17th).
After slumping to a two-year low mid-way through April, the precious metal had moved higher but now appears to be enduring a long-term weakness once more, dropping by 0.66 per cent to $1,376 per ounce this morning.
Analysts have suggested this has come as a result of a strengthening in the US dollar, as the two markets often correlate, caused by investors recycling cash to purchase equities.
The greenback moved higher after a US Federal Reserve official suggested the central bank may look to reduce its asset-purchasing programme in the coming months.
John Williams, president of the Federal Reserve Bank of San Francisco, said the recent reduction in the country's unemployment rate indicates the economy is improving steadily. He suggested the scaling back process could begin next month and be completed before the end of the year
Find out about commodities trading and learn CFD strategies at City Index
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.