Strong Dollar Pushes Down Spot Gold

Spot gold prices fell as demand remained subdued and the dollar reached a one-week high against the euro. Analysts point out that mixed economic data and uncertainty regarding the dollar’s movement are confining gold prices to a narrow range.

Spot gold traded 0.8% lower at $1,132.45 per troy ounce as the euro/dollar fell by 0.8% to $1.4387. According to analysts at Commerzbank (OTC: CRZBY) Gold seems set to trade within the range of $1,117 to $1,161 per ounce for some time to come, given that the metal has lost much of its momentum at the start of the year and could go lower as investment demand declines.

Holdings in the world’s largest gold ETF, SPDR Gold Trust (NYSE: GLD), have fallen by nearly 20 metric tons in 2010.