By FX Empire.com
Gold prices fell on Monday, where the U.S. dollar gained strong momentum against major currencies on mounting concerns over the fiscal health of the United States after the “supercommittee”, which is responsible for delivering budget cuts of at least $1.2 trillion over the next decade by Nov. 23, was reported to have failed to reach an agreement amid difference between Democrats and Republicans over raising tax revenues, while fears from Europe continued to dominate traders as well, which boosted demand for lower yielding assets, leading the U.S. dollar to rise and putting strong negative pressure on dollar denominated assets including gold.
Traders will continue to monitor the developments from Europe regarding the debt crisis, where rising yields inEuropesuggest investors are concerned amid the uncertainty that is surrounding the outlook of the EU debt crisis. Traders will be also eyeing the latest developments regarding the budget deficit deal and whetherU.S.lawmakers will be able to reach an agreement or not. Moreover, traders will be eyeing the second GDP estimate for the third quarter of this year, while finally, the FOMC Minutes are due to be released later on Tuesday.
Accordingly, we should expect heavy fluctuations to continue to dominate gold prices over the coming period, and if the U.S. dollar extends its strong gains, gold prices are likely to remain under pressure as a result.
Originally posted here
