by Alasdair MacLeod
On Monday, gold rallied to test the $1300 level, and silver $18.00.
Given the sharpness of the move up in the last week of April, it was hardly surprising that some consolidation was in order. Underlying this performance was the recent weakness of the dollar, which had a mini-bounce aided by a weaker yen, the yen having been rising strongly against the dollar this year so far.
Bearing in mind that a lower rate quoted in the foreign exchange markets means a weak dollar and strong yen, the yen has risen from 121 to the dollar to 105.6 last Tuesday since 30th January, an increase of over 10%. Therefore, a technical correction for the dollar is due, which can be expected to put some pressure on the gold price.