Gold dropped on Tuesday trading on firmer dollar and drop in Chinese growth to the slowest pace in two years. The shiny metal is still getting direction from the dollar as now the inverse relation between gold and dollar is very strong. The dollar rose for the second day to touch a high of 77.54 compared with the day's opening level of 77.18, according to the dollar index which tracks the dollar movements against a basket of major currencies. On the other hand, spot gold is traded around $1631.02 an ounce after recording a high of $1676.65 and a low of $1626.73. Refuge demand on the U.S. dollar increased today on concerns the European anti-debt crisis plan, that will be introduced on October 23, will not provide a complete fix to the two-year crisis, according to the latest announcements by German officials. Still, the main focus is on the euro area to see European leaders' ability to come out with a comprehensive and decisive plan at their next meeting. Thus, after the dovish tone seen this week from German officials, investors resorted to the dollar once again as a favorite safe haven. In the same context, data released today from Germany showed that investor confidence fell to -48.3 in October from -43.3 in September, according to ZEW survey. Moreover, the Chinese economy expanded 9.1% in the three months ended September compared with the 9.5% growth recorded in the second quarter and median estimates of 9.3%, affected shiny metals on possible lower demand from the world's biggest metal consumer. Among other precious metals, sliver edged down to $30.82 from the day's opening of $31.73, platinum surged to $1522.00 from $1543.25 and palladium climbed to $602.25 from $611.00 as of 14:26 GMT. Also, crude oil slipped to $85.96 a barrel from the day's starting level of $86.27.
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