A mixed day on the markets, spot gold traded lower carrying over from the European session. The metal touched a low of $1652 in early trade.
A rallying U.S dollar vs. all major currencies, in particular, the Euro dollar was the theme of last week. The greenback has given back some of those gains in early week trading as the Euro has rallied to 1.3242, the highest in a week. Spot gold followed the single currency higher taking itself to $1670.
It was a light day for U.S economic data. The release of the U.S NAHB housing market index was unchanged at 28 last month - 50 is the dividing line between positive and negative sentiment. The 50 level hasn’t been touched since 2006. It was a quiet day in general for the metals complex as gold mostly traded in a tight range.
Investors are taking a breather, as they did after the drop in prices several weeks ago,” Standard Bank said in their daily note.
On the physical side, the Indian Government had doubled the import duty tax which has dampened physical sales in the country. The import tax is now 4%, from 2 %.
Expect a choppy week ahead as the market looks for the next shoe to drop. U.S Data on tap this week includes building permits tomorrow, and Wednesday a note to watch is oil inventories, as a rising oil price puts downward pressure on a recovering economy.
Spot silver climbed to its highest in more than a week touching $33.13. The grey metal remains subdued following the steep sell off on March 7th. The gold silver ratio continues its consolidation unable to break higher above 51.90 an unable to break lower at 50.00. A break in either direction will set the trend in the short term for the dual role metal.