Gold prices were easing Tuesday, while trading in the dollar was mixed.
Benchmark bullion futures were losing $1 at $885.30 an ounce in recent action on the Comex division of the New York Mercantile Exchange.
One euro was buying $1.55 vs. $1.5486 Monday. The British pound was selling for $1.9516 vs. $1.9632 in the last session. The dollar was steady against the Japanese yen, trading for around 108 yen, the same as previously.
Weakness in the dollar against the euro was prompted by unexpectedly strong producer price inflation data and weak reports on housing and manufacturing.
"This supports RBC's base case that when all the dust from the credit crisis and stimulus settles, the Fed will return to easing to support its full employment mandate," writes T.J. Marta, a fixed income strategist at RBC Capital Markets in New York.
An easing of monetary policy by the
would mean lower short-term interest rates and would thus make the U.S. dollar less attractive to hold than other currencies, such as the euro.
Gold Isn't Totally Safe
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CurrencyShares Euro Trust
was rising 0.2%. The
CurrencyShares British Pound Sterling
was lower by about 0.6%. The
CurrencyShares Japanese Yen Trust
was steady, barely changed.
SPDR Gold Trust
, which holds solid gold bars, was gaining 0.2%.
In the mining patch,
was rallying about 3%, while
was up 2.3%.