The dollar index hovered around three-year depths as investors and analysts wrestled with the prospect of interest rates remaining low. The precious metals are having mixed fallout in response to the U.S. Navy SEALs killing global terror icon Osama bin Laden.
"The US dollar is significant in the price development of the precious metals," according to Peter Fertig, an analyst with Quantitative Commodity Research. "With the divergence of monetary policy in the US and the euro zone in particular, I expect the dollar is going to
weaken further in the medium term."
At 8:24 a.m. on Tuesday, gold futures slipped 0.82 percent, a $12.70 drop to $1,544.40 per troy ounce. At 8:25 a.m., silver futures were down 5.14 percent, a $2.369 loss to $43.715 per troy ounce.
"I don't expect this to be a lasting factor, terrorism remains a threat to Western society and for that reason, there is no convincing argument to abandon gold as a safe-haven if one has bought it as a safe-haven against terrorism," Fertig said.
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