Gold Retreats From Five Week High On Outlook For Stronger Dollar
Bloomberg: By Debarati Roy and Nicholas Larkin
Gold fell for the third time in four sessions as a whipsaw in oil increased prices swings for bullion.
The metal surged yesterday by the most since September after crude futures rebounded from a five-year low. The oil rally fizzled today, and the dollar climbed to the highest since March 2009 against a basket of 10 currencies. Gold’s 60-day volatility jumped to the highest since March.
“The dollar’s strength is gold’s biggest enemy,” Fain Shaffer, the president of Infinity Trading Corp. in Indianapolis, said in a telephone interview. “Investors are wondering whether yesterday’s rally in oil prices was a dead-cat bounce.”
Gold traders track the cost of oil because of its impact on consumer costs. U.S. inflation expectations, measured by the five-year Treasury break-even rate, fell 24 percent this year, set for the biggest decline since 2008. The metal dropped to a four-year low last month as investors saw less need for a store of value.
On the Comex in New York, gold futures for February delivery dropped 1.5 percent to settle at $1,199.40 at 1:54 p.m. on the Comex in New York. Prices yesterday jumped as much as 3.9 percent, and volume climbed to an estimated 370,132 contracts, the highest since June 20, 2013.