The US dollar is the global reserve currency in which all commodities are traded. So, depending on the strength or weakness of the dollar, commodities can become relatively more or less expensive. The US revealed stronger-than-expected employment and gross domestic product (GDP) figures at lunchtime, providing a boost to the US dollar which in turn pushed the price of Gold lower.
The Federal Reserve will make an important announcement tonight at 7pm. The Fed has pegged its monetary policy to the strength of the US economy, and today’s economic data was strong, so it is possible the Fed will discuss tightening its policy. This could push gold even lower.
Gold is also losing ground to equities. Reporting season is nearly over in the US, having just begun in Europe, and broadly speaking companies’ reports have been better than expected. This has encouraged traders to put their money into riskier assets like stocks. While equity markets remain high, we could see gold lose further ground.