UNITED STATES May 24 2016 11:24 AM
NEW YORK (Scrap Register): Gold has benefited from the softer U.S. dollar so far in 2016, which in turn means the yellow metal could go right back where it was if the greenback keeps building on its recent gains, said Citi Research.
The bank pointed out that the last time the dollar index was at the 100 level in December, gold was around $1,050 an ounce.
“The weakening (of the dollar index) from January-April was the primary reason for gold’s rise,” said analysts. As a result, they said there is “no reason at all why gold should not once more trade at $1,050 an ounce if US$-DXY rises back up to the 100 level (now 95.3). There is also nothing to prevent gold falling below $1,000 an ounce if US$-DXY rises above the 100 level.”
The spot dollar index fell from a high of 100.51 in early December to a low of 91.919 in early May, before rising roughly four points again.