A quick definition for folks who aren't obsessed with this stuff: the numéraire is the unit of account. Is your gold priced in dollars or are your dollars priced in gold?
Or, from Wikipedia:
If a store sells 1 can of soup for $1.20, the numéraire is dollars. If the store would buy $1 for 5/6 of a can of soup, the numéraire is cans of soup.With the dollar as the numéraire a 2% increase in it's price versus other currencies should result in a slightly-larger-than 2% decrease in the price of gold before any supply/demand factors for gold itself are priced in.
$1112.90 last down 19 bucks.
PRECIOUS-Gold hits five-year low under $1,100 on Chinese selling
* Gold falls as much as 4 pct briefly to $1,088.05* Platinum, palladium plunge to multi-year lows
* Huge trading volumes on Shanghai Gold Exchange (Updates throughout, changes dateline from MANILA)
By Clara Denina
LONDON, July 20 (Reuters) - Gold prices plunged as much as 4 percent to their lowest in more than five years on Monday as sellers in top consumer China offloaded the metal.
Investors have been finding less and less reason to hold gold as an insurance against risk, with the dollar strengthening ahead of what is expected to be the first increase in U.S. interest rates for nearly a decade.
Spot gold fell $45.55 to its weakest since March 2010 at $1,088.05 an ounce shortly after the Shanghai Gold Exchange opened, with volumes soaring to a record.
It regained some ground, trading above the key $1,100 support level, but was still down 1.8 percent at $1,113.80 an ounce by 1002 GMT.
Spot platinum fell for the fifth straight session, down 5 percent at a fresh 6-1/2-year low of $942.49 an ounce, due to oversupply, sluggish demand and weaker gold prices, which encouraged speculative selling.
"The Asian market missed the action on Friday when U.S. players were already attempting a break of $1,130, a major support level, and has pushed prices much lower today," ABN Amro analyst Georgette Boele said....MORE