Gold Price Falls on Global Turmoil
Gold recently rallied by over $50 from an open last Wednesday at $1117 and peaking on Monday at a high of $1169. That was short lived as the shiny metal dimmed and we witnessed three days of consecutively lower prices, now trading at $1125. The reversal in gold coincided with the sharp drops in major worldwide stock indices; on Monday the S&P dropped 4.1% and gold followed suit. Concern over the state of China’s economy and the devaluation of its currency have been major factors driving stock and gold prices down. Up until now, the general strength of the US Dollar has also been putting pressure on the price of gold and further strong US economic data may keep that in place. Today data for US Durable Goods Orders was released, the market expectation was for a reduction of 0.4% but the actual release was +2.0%. The US Dollar will most likely benefit from these strong numbers and again this means more downward pressure on gold price. Price went from $1131 at the time of release to $1125 ten minutes later.