Gold Decreased to $1,256.50/ounce as Oil Made Small Gains

Demand for the dollar weakened over the week, as reflected by the Lebanese pound’s peg against the dollar that went up from $/LP 1,510-1,514 with a mid-price of $/LP 1,512 to $/LP 1,509-1,513 with a mid-price of $/LP 1,511 this week. Foreign assets (excluding gold) at the Central Bank dropped a monthly 2.25% from $38.73B at end-November to $37.86B by end-December. Meanwhile, the dollarization rate of private sector deposits stood at 65.68% in November 2014 compared to 66.13% in December 2013.

The euro appreciated against the greenback after the beginning of presidential election campaigns throughout EU countries such as Greece, Spain and Ireland. This caused the euro to strengthen against the dollar by 0.71%, ending the week at €/$ 1.314.

Demand for gold eased down as oil prices experienced slight gains during the week. The price of gold was reduced from $1,301.23/ounce on Thursday 22nd of January 2015 to $1,256.50/ounce this week.

By Friday January 30th, 2015, 12:30 pm Beirut time, the dollar-pegged LP depreciated against the euro, descending from €/LP 1,693.53 the prior week, to €/LP 1,705.59. The Nominal effective exchange Rate (NEER) gained 1.42%, over the week to 154.21points, while its year-to-date gain reached 4.68%.

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