The Dollar’s Recovery is Affecting the Price of Gold

Gold prices fell on Wednesday after rising to a three-and-a-half-month high. This was caused by the dollar starting to recover from low levels, with technical indicators pointing to a short-term correction.

 Spot gold fell by 0.4% to $1312.35 an ounce. The precious metal climbed to $1321.33 an ounce earlier in the session, the highest since September 15. There was little change in gold in US futures, which traded at $1315.60 an ounce. The dollar index, which tracks the performance of the greenback versus a group of six major currencies, rose by 0.1% to 91.964 after falling to a three-month low on Tuesday.

 The dollar suffered its biggest annual loss since 2003 last year, helping gold rise by more than 13% throughout the year. The precious metal gained $55 an ounce in the last three weeks of 2017 alone. Analysts say the mid-term future for gold looks positive. Among other precious metals, palladium fell by 0.1% to $1,090.80 an ounce, after reaching a record high of $1096.50 an ounce on Tuesday. Gold rose by 57% in 2017 and continued to rise, supported by concerns over supply shortages. Analysts predict that around 80% of the world demand for palladium will come from increased demand for gasoline-powered cars, which many consumers now prefer over diesel cars. Silver fell by 0.8% to $17.05 an ounce after climbing to a six-week high of $17.21 an ounce earlier in the session. Platinum fell 0.8% to $936.10 an ounce.

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