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Gold, Silver And Other Commodities Fall Against U.S. Dollar

The U.S. Dollar grew more powerful between the close of trading on Tuesday and the opening bell Wednesday morning and the effect on gold, silver and other commodities that are priced in gold was almost immediate. Gold took a 2.2 percent hit at the start of trading and broke through the support barrier of $1400 before finally settling at $1392, a loss of $29 per ounce on the day.

Silver dropped even more than gold, losing 3.5 percent of its value in a $0.70 drop that left the silver spot price at a relatively paltry $22.71, only days after dropping below the $23 per ounce mark and creating a stir among silver market analysts that the “poor man’s gold” that a silver rush that could push prices above $25 per ounce was on the horizon.

Gold and silver were not the only commodities that suffered thanks to the dollar’s temporary surge, which was caused more by a downfall of the euro and Asian currencies than by the dollar gaining power. Oil prices were down substantially, as were prices for copper, corn, sugar and wheat. A U.S. Commerce Department report that revealed wholesale/producer prices were down 0.7 percent in April further hampered commodity prices.

Gold and silver prices for the rest of the week will be influenced by forthcoming U.S. economic data, movement of U.S. currency and investor demand for gold in both the physical and derivatives markets. Visit GoldSilver.org on Friday for an end-of-the-week analysis of the gold and silver markets.

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