Dollar strengthens, price of gold falls

Dollar strengthens, price of gold falls

The price of gold has ended its run of all-time highs after positive economic US data sent the dollar higher.

On Friday, the Labor Department revealed that the US economy lost fewer jobs in November with the unemployment rate falling to 10% from a rate of 10.2% in October.

Figures show that US employers cut the lowest number of jobs during the month since the onset of the recession two years ago.

Following the news, the dollar gained on the Japanese yen and the euro by 2% and 1.3% respectively.

However, gold plummeted by $65, or 5%, to $1,161.4 an ounce, down from an all-time high of $1,226.56 an ounce in early trading.

The rise of the price of gold over recent weeks has been attributed to a weakening US dollar, which typically moves in the opposite direction to the precious metal.

The dollar has been falling after the Federal Reserve said US interest rates will remain low, which makes the US currency less attractive to investors.

Matt Zeman at LaSalle Futures Group commented: “So many people have piled into gold, so this pop in the dollar is freaking people out….the dollar is rocking and gold is getting its teeth kicked in.”

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