If Eurozone woes translate to dollar strength, that could limit gold’s upside because the yellow metal is denominated in dollars.
“Yet, the upside in gold – in U.S. dollar terms anyway — may end up being limited if the turmoil should also result in dollar strength, since the precious metal tends to move inversely to the U.S. currency,” according to Kitco. “Traders will be watching to see if there is safe-haven buying of U.S. bonds, a sell-off in the euro or further declines in equities, all of which can affect precious metals.”
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Tom Lydon’s clients own shares of GLD.