The gold market has seen some liquidation today as the dollar
strengthens, prompting a small correction in price, according to one European
trader contacted by Platts on Tuesday.
"The dollar is continuing to strengthen and this is putting gold under
pressure, but at the moment this is quite a healthy correction, even if it was
a little unexpected by the market," said the trader.
"However, if the dollar continues to strengthen it could become a bear
trap, although my feeling is that for the rest of this week gold will continue
to trade in the higher ranges, with a lower level around $732/oz," said the
trader.
London spot gold was seen at 735.50/oz at 0849 GMT, after a Monday PM fix
of $742.50/oz, and an AM fix of $745.25/oz. The euro was bid at $1.4196,
slightly down from Monday afternoon.
"Generally, we've seen some pronounced liquidation today on the back of
growing strength in the Hang Seng and Nikkei," concluded the trader.