Gold prices dip as greenback soars to fresh 4-month peaks
On Wednesday, gold prices dropped during European trade as a broadly stronger American dollar dared to dampen the overall appeal of the number one precious metal.
The greenback climbed to a new four-month peak early on Wednesday, after data revealed American housing starts surged more than expected in June, thus underpinning a theme of strength in the American economy.
The U.S. dollar index, normally gauging the greenback’s strength against key six currencies, climbed up 0.25%,being worth 97.30, up from levels of approximately 96.00, the greatest value since March 10.
A stronger greenback normally weighs on gold, as it dampens this metal's appeal as an alternative asset and makes dollar-priced commodities less affordable for holders of other currencies.
A recent string of positive economic reports, including ISM manufacturing, June retail sales as well as employment data for this month appeared to be all much better than expected, thus suggesting that economic growth regained speed during the second quarter.