Gold Traders Keeping Close Tabs On U.S. Dollar Index
Gold traders will be closely eyeing the U.S. dollar index after the yellow metal recently hit a four-month high on weakness in the greenback in the wake of soft U.S. economic data, says Rob Kurzatkowski, senior commodity analyst with optionsXpress. “The U.S. dollar index is currently at a technically vulnerable level, hovering just above support,” he says. “Failure to hold this support level could result in further technical selling, which could support further gold advances.” However, he adds, inflation at the moment remains a “non-factor” for the precious metals. He ascribes the recent boost in gold to a weaker dollar after soft retail sales data last week followed weak non-farm payrolls data earlier this month, suggesting Federal Reserve policy-makers “may have their hands tied when dealing with interest rates.” Kurzatkowski adds, “Just weeks ago, the idea that the Fed would raise rates by year’s end was seen as a done deal by many traders. Now, many traders are doubting the Fed will have the justification for the rate hike by year’s end, even if data vastly improves over the next two and a half months.” |
