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Wednesday, January 14, 2009

Gold Falls for Third Session in a Row on Poor Retail Sales, Dollar Strength

For the third session in a row gold prices plummeted, as poor retail sales and the continued strength of the U.S. dollar put downward pressure on the metal.

It was no surprise to investors that retail sales were weak, but the numbers were down over twice the expected decline, falling by 2.7 percent last month. Declines have happened in the retail sector now for six straight months.

This will continue to hamper commodities as consumers continue to save rather than spend, and demand for goods plummet.

Another factor is the cutting of interest rates by other countries to attempt to jumpstart there economies, which keeps the dollar stronger than it normally would be in these types of conditions.

February delivery for gold dropped by $11.90 to finish the session at $808.80 an ounce on the New York Mercantile Exchange. Over the last three days gold has plunged by 5.4 percent.

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