Market Snapshot – Gold Prices Fall Hard

Gold Falls on Heavy Selling

Gold prices suffered a lot today as they fell hard on large volume that was seen across the board. This was a long time coming with the euro and the pound trading strongly. This has led to a strange scenario where the gold prices have been falling despite the fact that the dollar has been weak across the board. It is clear that the central banks in the Eurozone, UK and Canada are seriously looking at reversing their rate policy and this has led to funds flocking to the respective currencies in the hope of better yields. This meant that the funds get pulled out of lower yielding assets like gold and silver and that is why we have been seeing the gold prices keep falling over the last couple of weeks. With the 1240 region being broken decisively today, the next stop is 1220.

Dollar Recovers a Bit

The dollar has been on a recovery mode since the morning and this is the case as of this writing, though it is not sure how long it is likely to last. This recovery might be a bounce before the dollar begins to fall again or it might stage a full recovery in the days to come. For the days to come, the news and the data from the US will be watched very closely to see if there is an improvement in the incoming data. With a lot of data slated to be released from the US later in the week, we are seeing the dollar rising in anticipation of the events.

Chinese PMI Pressures the Aussie

The Chinese PMI came in weaker than expected and this has placed the Aussie dollar on the backfoot. The Aussie is very much dependent on the Chinese economy as they are one of the biggest markets for the commodities like iron ore that are produced from Australia. So any signs of weakness in the Chinese economy does not augur well for the Aussie and this is why we have seen the Aussie dollar under pressure since morning as it struggles to maintain the 0.7650 region.