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Gains of Dollar Lead to Fall of Precious Metals

September 4, 2014 at 23:17 by Vladimir Vyun

Gold fell together with other precious metals today as gains of the dollar drove investors away. The US currency rallied to the highest level since July 2013 against the basket of 10 major currencies.

There were two reasons for the dollar’s rally. The most important one was a surprise interest rate cut and a quantitative easing program from the European Central Bank. The second one was the bunch of good economic reports from the United States that confirmed recovery and possibility of early monetary tightening from the Federal Reserve.

Gold usually moves inversely to the greenback, like most dollar-priced commodities. While sometimes it gets help from the same factors as the dollar, mostly a negative market sentiment, nowadays the US currency is usually considered to be a more attractive safe investment than gold.

December futures for gold dipped 0.50 percent to $1,260.20 per troy ounce as of 23:11 GMT on COMEX today, trading near the lowest level since June. Contract for silver lost 0.70 percent to $19.06 per ounce. Spot price for platinum went down 0.10 percent to $1,404.50 per ounce, and palladium fell 0.11 percent to $887.80 per ounce.

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