Strengthened USD Weakens Gold

The price of gold fell as low as $1562.92 an ounce during mid-day trading yesterday, as a strengthened US dollar made the precious metal more expensive for international buyers. Overall, gold fell more than $20 over the course of the day before staging a minor upward correction and stabilizing at $1570. Today, gold traders will want to pay attention to the USD, and any movement it sees following a speech from Fed Chairman Bernanke. If the Fed Chairman strikes a pessimistic tone regarding the pace of the US economic recovery, investors may begin speculating that a new round of quantitative easing may be coming, in which case the dollar could reverse its bullish trend. As a result, gold could begin moving upward again.

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