U.S. Dollar Rally and High Tech Stocks Hold Back Gold’s Rise

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After a rally among equities and the U.S. dollar as a response to positive economic data, gold has dipped to a two-and-a-half week low on Thursday, April 24. Additionally, tech industry stocks have made a strong rebound causing the safe-haven appeal of gold to lose some of its luster – at least for now.

Silver has also dropped to a low (a near five-month one) of $18.91 per ounce. Based on these prices, the gold-silver ratio is now at its highest level since August. A high gold-silver ratio usually reflects low gold prices or high silver ones, in this case reflecting the former.

Ole Hansen, head of commodity strategy at Saxo Bank, believes “We are in a bit of a fragile state in gold … at the moment investor interest remains subdued as ETFs outflows continue and speculative interest has dropped.”

The U.S. dollar rallied due to orders for long-lasting domestic manufactured goods rising higher than expected in the month of March. Business capital spending plans also skyrocketed, creating higher expectations of more rapid economic growth in the second quarter of this year.

Global stocks, especially tech ones, have been up as of late. U.S. economic news have recently proven to be a stronger influence on gold prices than the tensions between Ukraine and Russia.

Analysts have been noting that gold is struggling to break the $1,300 mark, where it has been hovering so far this year. A physical gold dealer in Hong Kong observes: “It seems that $1,300 is not easy to break through for the time being. There’s not much buying from China. People are just waiting for the price to fall.”

When gold is low, it is generally a good time to buy. As mentioned in our recent article, there has been a trend of investors purchasing gold when the buy-in price is low on top of supply threats both here and abroad, in hopes that prices will rise in the not-so-distant future. Why not buy gold when it is less expensive, and back up your finances for a lower initial price? Even better would be purchasing a Gold IRA to secure your retirement assets in particular. Call American Bullion at 1-800-326-9598 or fill out our simple online application today.