US Dollar, Gold Rise after Paris Attacks


Global safe havens rose on Monday, as investors turned to risk-off trading following the terrorist attacks in Paris on Friday.

More than 120 people were killed and a further 415 were injured in a series of coordinated attacks in Paris on Friday. The terrorist group Islamic State of Iraq and the Levant (ISIL), also known as ISIS, claimed responsibility for the attacks, citing France’s participation in a military offensive against the group in Syria.

Both the US dollar and gold prices rose at the start of the week, a rare occurrence, given that both assets typically track inversely of one another. The US dollar index, a weighted average of the dollar against six other currencies, climbed to a high of 99.21, the highest since April. The dollar index would subsequently consolidate at 99.10, adding 0.1%.

The dollar gained ground against the euro, despite stronger than expected Eurozone consumer inflation. The EUR/USD exchange rate fell 0.3% to 1.0735 just before the North American session.

Inflation returned to the Eurozone in October, revised estimates from Eurostat revealed on Monday. The Eurozone’s consumer price index edged up 0.1% annually in October, up from an initial estimate of zero. So-called core consumer inflation, which strips away volatile goods such as food and energy, was revised up to 1.1% from 1%.

Meanwhile, gold prices emerged from nearly six-year lows on Monday, reaching a daily high of $1,097.40 per ounce on the Comex division of the New York Mercantile Exchange. The yellow metal would settle at $1,087.90, advancing $7. Prior to Monday’s gains, gold prices had fallen nearly $100 in less than three weeks.

Global stocks traded mostly lower at the start of the week. Most of Europe’s major averages were down, with the STOXX 600 Index edging down 0.1% in intraday trade.

Asian stocks experienced more volatility, with Tokyo’s Nikkei falling more than 200 points or 1%.

Hong Kong’s Hang Seng Index fell more than 385 points or 1.7%, its second consecutive decline.

Meanwhile, the Shanghai Composite Index closed up 0.7%.

American stock futures were also down across the board after ending last week sharply lower. The S&P 500 and Dow Jones Industrial Average each declined more than 3% last week, marking the first weekly decline for US stocks in nearly two months.