Gold tracked WTIs upward momentum after the Japanese economy minister made a statement that a further weakening of the yen might harm growth. This led to an increased demand for the Asian nations currency and weakened the dollar, thus increasing precious metals price.
The U.S. dollar tends to trade in an inverse relation to dollar-priced commodities. A weakening of the greenback makes dollar-priced commodities cheaper for foreign currency holders and increases their appeal as an alternative investment. On the Comex division of the New York Mercantile Exchange gold futures for July settlement rose by 0,09% to $1 385,35 in Asian trading on Tuesday, after gaining 1,73% in U.S. trading on Monday.
Gold traders have been mainly tracking FEDs moves this year. The Quantitative Easing program could be slowed or even completely shut. FED representatives have already proposed that last week, citing indications of an improving U.S. economic environment. Investors are looking ahead into Ben Bernankes statement on Wednesday.
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