Rise of the dollar is lead by European Central Bank and Bank of England left interest rates unchanged 7 Aug 2008, at 4.25 and 5 percent respectively, coinciding with the Federal Reserve’s move to leave interest rates unchanged at 2 percent on 6 Aug 2008. Similar to the Fed, the ECB did note that risks to inflation remains high due to the volatility in commodity prices and they will continue to monitor the situation very closely.
The NYBOT spot dollar index rallied to 74.544 from 74.244 while EUR/USD settled lower at 1.5324 from 1.5412.
South African gold output fell after state-owned power utility Eskom suffered a near collapse in the electricity grid in January, which led to a five-day country-wide mine shutdown. It supply 90 to 95 percent power to mines in the country, the world's biggest source of platinum and the second-ranked gold producer.
Spot gold ended 0.85 percent or $7.40 lower at $871.20 an ounce.
Crude oil futures for September delivery settled up $1.44 or 1.21 percent at $120.02 a barrel. We believe that oil price already peak at $147 in July 2008 and now it is coming down.
Take note that the dollar is very much stronger and the greenback has gained quite a bit against a basket of currencies. If this battering in currencies continues, gold will not be spared either and a continued rise in the dollar will certainly put pressure on gold.
“Deflation” contagion hit across Commodities, Energy, Equities and Forex, most index funds are pulling out resulting to a steep fall in commodities the market is witnessing. Long term Gold investors are staying at the sideline waiting for recovery signal.
USD is the only asset class benefiting at the moment, as it strengthens against most currency pairs with the EURO hitting a low of 1.5163.
The NYBOT spot dollar index rallied to 74.544 from 74.244 while EUR/USD settled lower at 1.5324 from 1.5412.
South African gold output fell after state-owned power utility Eskom suffered a near collapse in the electricity grid in January, which led to a five-day country-wide mine shutdown. It supply 90 to 95 percent power to mines in the country, the world's biggest source of platinum and the second-ranked gold producer.
Spot gold ended 0.85 percent or $7.40 lower at $871.20 an ounce.
Crude oil futures for September delivery settled up $1.44 or 1.21 percent at $120.02 a barrel. We believe that oil price already peak at $147 in July 2008 and now it is coming down.
Take note that the dollar is very much stronger and the greenback has gained quite a bit against a basket of currencies. If this battering in currencies continues, gold will not be spared either and a continued rise in the dollar will certainly put pressure on gold.
“Deflation” contagion hit across Commodities, Energy, Equities and Forex, most index funds are pulling out resulting to a steep fall in commodities the market is witnessing. Long term Gold investors are staying at the sideline waiting for recovery signal.
USD is the only asset class benefiting at the moment, as it strengthens against most currency pairs with the EURO hitting a low of 1.5163.
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