After shedding around US$60 per ounce over the past two days of trading, gold edged higher today as bargain hunters bought into the cheap price.
Gold was hit by a surge in the US dollar, which was boosted by positive comments on the US economy by the Federal Reserve and upbeat economic data released in the US. Following this week’s policy meeting, the Fed said it expected moderate growth in the US economy.
The meeting followed Friday’s bullish non-farm payrolls figures, which revealed an increase of 227,000 for February. Today, the Department of Labor said jobless claims fell to four year lows last week.
A stronger US dollar dampens demand for gold, which is seen as an alternative asset to the greenback.
As the American currency rose, gold dipped to eight week lows on the New York Mercantile Exchange (NYMEX).
Investors started buying gold after spot prices slipped below US$1,640.
Gold traded at US$1,648/oz this afternoon, up US$5 from Wednesday’s close. Silver added 20 cents to reach US$32.35/oz and platinum rose US$1 to US$1,673/oz.
