By FX Empire.com
Gold prices fell sharply on Tuesday, as mounting concerns over the outlook for global growth and fears from the European debt crisis boosted demand for lower yielding assets, which provided the U.S. dollar with huge bullish momentum that forced gold prices to drop, since gold is a dollar denominated asset.
China reported on Tuesday that growth in the third quarter expanded at the slowest pace in two years, while rating agency Moody’s Investors Services announced it is reviewing France’s Aaa rating, and could put the outlook for French debt on a negative watch over the coming three months. Traders targeted the U.S. dollar as a result, which put gold prices under pressure.
The outlook for gold remains generally to the upside, however, we still expect volatility to continue to dominate gold prices, and that could still weigh down on gold prices, but overall, our general outlook for gold prices remains to the upside. Traders will be eyeing inflationary figures from theUnited Stateson Wednesday, as the consumer price index for September will be released at 12:30 GMT.
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