Gold recovers from recent selling pressure as dollar declines

Gold recovers from recent selling pressure as dollar declines

2 June 2015, 16:00
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Gold edged higher in early U.S. trading Tuesday, rebounding from recent selling pressure, as the U.S. dollar index was solidly lower today - which is working in favor of the precious metals and the raw commodity sector.

August Comex gold was last up $3.30 at $1,192.10 an ounce. July Comex silver was last up $0.035 at $16.715 an ounce.

Elsewhere in the commodity market, crude oil prices were higher and hit a two-week high. A key OPEC oil cartel meeting in Vienna, Austria is on tap this week. The Saudi Arabian oil minister says OPEC’s strategy of not cutting its production in order to gain its market share is working at weeding out the not-so-strong producers - namely U.S. shale producers.

In the euro area, deal between Greece and its IMF/EU creditors seems to be approaching, as Prime Minister Alexis Tsipras said he sent a new "realistic reforms plan" to them. The euro was given a boost after this news. However, still a big number of analysts believe the the country might default on her debt.

As it was reported earlier on Tuesday, inflation in the euro area rose in May for the first time in six months - at up 0.3%, year-on-year. The rise slightly surpassed expectations, as the consensus saw the number as up 0.2%.

Meanwhile, the OECD, a Paris-based economic think-tank, reported inflation in the world’s industrialized countries fell to 0.4% in April from 0.6% in March, on an annualized basis. The April figure was the lowest since 2009.

In Asia, India’s central bank cut its main interest rate by a quarter-point. China’s stock market saw a rebound this week after last week’s sharp sell-off.

U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the ISM New York report on business, manufacturers’ shipments and inventories, and the IBD/TIPP economic optimism index.

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