25-Oct (USAGOLD) — Gold has trading back above 1270.00, up more than $7 on the day, despite ongoing firmness in the dollar. While this leaves the yellow metal well contained within the recent range, as I noted yesterday, the resilience in the face of dollar strength is encouraging.
The dollar index eked out another new 8-month high in overseas trading amid rising expectations that the Fed is going to try and get some additional clearance above the zero-bound, regardless of persistent lackluster economic data. The need for more clearance makes a lot more sense than arguing that the economy is doing just fine, but I remain a skeptic.
Chinese yuan weakness is buoying the greenback as well. The USD-CNY rate set 6-year highs and the offshore yuan set a record lows.
