Gold Price Falls Sharply Tuesday Due to Dollar Strength - Gainesville Coins News
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Gold Price Falls Sharply Tuesday Due to Dollar Strength

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Gold Price Falls Sharply Tuesday Due to Dollar Strength

A firmer U.S. dollar continued to sap any positive momentum from the precious metals on Tuesday.

The yellow metal tumbled another 0.7% (-$9) this morning. Gold prices traded above $1,316 per ounce last night before falling back to $1,308/oz.

Spot silver also fell, losing 1.1% (-19¢) to $16.12/oz.

In the meantime, platinum was off by $11 (-1.2%) to $940/oz while palladium likewise sank 1.1% to below $975/oz.

The precious metals ended yesterday's session mixed amid up-and-down action.

Tech Stocks Shake Off Slump as Dollar Climbs Higher

U.S. stocks recovered somewhat from troubling news about user data shared on Facebook being given to—or perhaps sold to—a private political advertising firm called Cambridge Analytics.

Although the apparent disclosure of the data is against Facebook's terms of use, investors are reacting negatively to the slow and muddled response by the social media company. It is now under greater scrutiny from the Federal Trade Commission (FTC).

Shares of Facebook tanked 6% to start the week, and were down another 1% in early trading today.

Tech stocks in general have slumped after strong year-to-date gains and an exceptional performance in 2017.

Fears of tighter regulation across the sector are largely to blame for the losses, especially after an autonomous vehicle for Uber struck and killed a pedestrian in Arizona. The ride-sharing company will halt its use of driverless cars in the wake of the accident.

Interestingly, the Nasdaq had already been experiencing top-heavy price movements before the Facebook and Uber stories. Just five companies—Microsoft (MSFT), Apple (AAPL), Netflix (NFLX), Intel (INTC), and Amazon (AMZN)—have accounted for 50% of the index's gains from its February lows.

One might dub these the "MANIA" stocks. This dynamic makes sense given that the Nasdaq is an index weighted by market capitalization.

Wall St lost well over 1% on Monday overall but the Dow Jones advanced 0.7% early in the following session. The S&P 500 lagged behind, nearly unchanged.

Nonetheless, the dollar rose 0.6% on the DXY index to 90.3 on Tuesday morning. It may be poised to break out with interest rates in the U.S. slated to rise. The greenback has spent all of March bouncing around the same relatively narrow channel.

Global Markets Fluctuate Amid Fed Gathering

The euro accordingly stumbled against the dollar to $1.227, its lowest in about three weeks.

Both the pound sterling and yen saw more modest losses.

European indices traded slightly in the green. Most Asian markets were down again overnight, yet the Hang Seng and Shanghai Composite closed barely above water.

This came amid rumors that the Trump administration is preparing a new round of tariffs against China.

Elsewhere in D.C., Congress is hashing out another must-pass spending bill. The legislation must be completed by Friday to (yet again) avoid a temporary government shutdown.

The spending measure would run through September and likely be the last major legislative effort before November's midterm elections.

Lawmakers are also considering tacking on other politicized issues to the bill such as gun control and funding for President Trump's border wall. Authorities in Texas are still investigating an increasingly sophisticated string of bombings in Austin and San Antonio.

Crude oil prices continued to surge. West Texas Intermediate and Brent crude were each up 1.8% on Tuesday morning to $63.20/bbl and $67.25/bbl, respectively.

Even amid a busy news cycle, all eyes are on the conclusion of the Federal Reserve Open Market Committee (FOMC) meeting tomorrow. The Bank of England will hold its monthly policy meeting on Thursday.

U.S. bonds mirrored the recent pattern of sideways undulations for the USD as the 10-year Treasury yield fell back to 2.88%.

 

The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.

About the Author

Everett Millman

Everett Millman

Analyst, Commodities and Finance
Managing Editor

Everett has been the head content writer and market analyst at Gainesville Coins since 2013. He has a background in History and is deeply interested in how gold and silver have historically fit into the financial system.

In addition to blogging, Everett's work has been featured in CoinWeek, Advisor Perspectives, Wealth Management, Activist Post, and has been referenced by the Washington Post.

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