Tuesday, 2 Mar 2010

Gold Hits 6 Weeks High as Dollar Tumbles

The USD witnessed a steady depreciation against most of its major currency counterparts during the afternoon trading session, as oil and gold rallied to their highest levels in almost six weeks, boosting demand for the currencies of commodity-producing nations. The Dollar is currently trading lower against the JPY by nearly 40 pips at 89.00. It is also trading lower against EUR and CHF.

Gold prices hit a six-week high above $1,133 an ounce on Tuesday, as the dollar fell against the EUR and crude oil maintained its strength, although some resistance emerged around that level. Further gains could be on hold for the rest of the week however, as investors await news that should provide clues to the state of the global economy.

Tomorrow, forex traders cannot afford to overlook a batch of data that is expected from the leading economies. Both the U.S ADP Non-Farm Employment Change and ISM Non-Manufacturing PMI will be released at 13:15 GMT and 15:00 GMT respectively, promising an extremely volatile trading day. Traders should take advantage of this unique opportunity and use the volatile market in order to capitalize profits.