Demand for the Gold Tumbled during the Week Ending 29 November

Demand for the dollar steadied over the prior week as reflected by the Lebanese pound’s peg against the dollar that remained at $/LP 1,510-1,514 with a mid-price of $/LP 1,512, since the 4th of September, 2014. Foreign assets (excluding gold) at the Central Bank rose by a monthly 1.15% from $38.42B at end-September to $38.87B by end-October. Meanwhile, the dollarization rate of private sector deposits stood at 65.87% in September compared to 66.13% in December 2013.

Outlook for global inflation decreased as the OPEC meeting on the 27th of November abstained from reducing output. The euro improved slightly against the dollar by 0.06%, ending the week at €/$ 1.2447.

Demand for gold fell this week as slumping oil prices increased forecasts of a dampening of consumer prices, reducing demand for an inflation hedge.  The price of gold went down from $1,193.44/ounce last Thursday to $1,191.25/ounce this week.

By Friday November 28th, 2014, 12:30 pm Beirut time, the dollar-pegged LP depreciated against the euro going from €/LP 1,875.18, the prior week, to €/LP 1,876.39. The Nominal effective exchange Rate (NEER) gained 0.04%, weekly, to 142.87 points, where its year-to-date gain reached 10.70%.

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