The U.S. Dollar Index spent the overnight session in a trading range, trying to make it above 87 but not succeeding on a sustainable basis. The bottom of the range was 86.65. As of 8:05, the Index was at 86.92.
A Bloomberg report, as webbed by Business Week, ascribed the drop to some investors selling after the metal's seven-day run.
“In the last two weeks gold has seen a really significant rebound” and that may spur some investor sales, said Peter Fertig, owner of Quantitative Commodity Research Ltd. in Hainburg, Germany. “The stability of the euro against the dollar is of course not supporting gold.”...The article also notes that the holdings of the SPDR Gold Shares Trust rose marginally yesterday, by 0.3 tonnes, to 1,268.23 tonnes.
“The gold rally has been driven by risk aversion and safe- haven buying and this is not going to go away anytime soon,” Zhou Li, an analyst at Changjiang Futures Co., said from Hubei, China. “We’ll see some profit-taking on the way up but the rally remains intact.”
A Reuters report described the pullback as a consolidation of recent gains.
"Things are definitely pointing to high risk aversion at the moment," said Commerzbank analyst Eugen Weinberg. "There is an uneasy feeling on the markets, and risk assets like industrial metals are being depressed by this."It also said that the above-linked pledge to continue investment in the Euro did not lead to a sustained bout of strength in the currency.
Before regular trading opened, gold sunk; the decline, which took four dollars off the price, continued when regular trading opened but halted at 8:30. A partial rebound followed. As of 8:48 AM, the spot price was $1,219.70 for a drop of $5.40 on the day. The Kitco Gold Index divided the loss into -$3.00 due to predominant selling and -$2.40 due to strength in the greenback. As for the U.S. Dollar Index, it managed to break above 87 in a run that began shortly after 8:00. Lasting until 8:41, it peaked at 87.155. As of 8:51, it had pulled back a little to 87.08.
There's a possibility of gold pulling up in the upcoming session, enough to make the six-day winning streak last seven days, but there aren't any indications of such as of yet. So far, the decline has been mild on little news, which says that there likely isn't any air pocket in gold's near future.