praveen
30-04-2008, 06:56 AM
Gold ended sharply lower after hitting a three-month bottom on Tuesday on the back of a firmer dollar, declining oil prices and weak sentiment ahead of an interest rate decision by the Federal Reserve. Gold often takes its cue from movements in the dollar because of its role as an alternative investment to currencies, stocks and bonds.
The outcome of the Fed meeting would set the tone for currencies and precious metals, dealers said. "Strength in the US dollar is clearly a major factor, plus we have seen a quite bit of money coming out of the StreetTRACKS exchange-traded fund.
Both these things are weighing on the market," said Dan Smith, analyst at Standard Chartered Bank. "There is some indication of consumers starting to come back in at these lower prices, but we are waiting to see how powerful that would be. I am looking for prices to recover somewhat from where we are now," he said.
The outcome of the Fed meeting would set the tone for currencies and precious metals, dealers said. "Strength in the US dollar is clearly a major factor, plus we have seen a quite bit of money coming out of the StreetTRACKS exchange-traded fund.
Both these things are weighing on the market," said Dan Smith, analyst at Standard Chartered Bank. "There is some indication of consumers starting to come back in at these lower prices, but we are waiting to see how powerful that would be. I am looking for prices to recover somewhat from where we are now," he said.