The second central bank currency market intervention in as many months sent the US dollar soaring and gold reeling overnight as market players rushed for various entry and exit doors to take advantage of the overt move.
Spot dealings in New York saw an opening gain of $5.80 in the yellow metal and traders quoted the bid-side in gold at $1,685 the ounce. Bullion narrowed those opening gains within the first sixty minutes of trading action however.
Gold's opening gains were trimmed to about only $3 per ounce (and silver's to a dime), despite a further dip in the greenback on the index. Buoyed by a better outlook among currency and equity specs, the commodities' complex also received a lift.
'Profit-taking' was only manifest until the S&P rating agency slammed the US rating outlook with the "negative" label. The AAA rating remains in place, but a shift from 'stable' to 'negative' outlook propeled gold to near a $1,500 price level.
The euro got a boost from inflation data and set the US dollar on a slippery slope towards lower levels. That slippage, in turn, revived the bull camp in precious metals and sent gold prices back towards the high $1,430s within the first hour of trading.
The midweek trading session in precious metals had something to offer to everyone, but most of all to the many platinum fans out there. Spot gold prices oscillated between gains and losses and silver rose in value.
On a one-, two-, and five-year scale, the iShares MSCI South Africa ETF comes in near the top of the pack, beating the PowerShares India Fund, iShares MSCI Brazil ETF and iShares FTSE China 25 Index ETF two out of three times.