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Gold Falls as Investors Prefer Dollar as Store of Value

November 16, 2011 at 7:37 by Vladimir Vyun

Gold declined today after it closed almost unchanged yesterday.

Gold could have profited from the debt crisis in the European Union. The problem is investors prefer to buy the US dollar rather than the precious metal as a safe haven. The greenback rose and gold fell.

It’s not the first time gold behaves as a simple commodity, not as a haven, suffering from negative market sentiment, not profiting from it. How long such unusual situation will last is hard to tell, but, perhaps, signs of slower economy of the United States could make the precious metal more preferable than the US currency? For now, though, the fundamental reports from the USA are good for the most part and the greenback remains in favor of investors seeking refuge from issues of the world economy.

Settlement for gold was at $1,769.90 today as of 7:31 GMT on COMEX. Yesterday, the closing price was $1,782.10, slightly above the opening of $1,781.60.

If you have any questions and comments on the commodities today, use the form below to reply.

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