Gold prices on Thursday headed lower, putting the precious commodity on track for a fourth straight decline and its longest skid since late April, with strength in the dollar contributing mightily to the deterioration in bullion.
Bullion was deepening its slide toward its lowest price since late July as investors appeared to prefer the turn to the U.S. dollar amid rising concerns about the global economic outlook and increased cases of COVID-19.
The dollar was inching 0.2% higher on Thursday but has climbed 1.8%, marking its steepest weekly rise so far against a basket of a half-dozen currencies, as measured by the ICE U.S. Dollar since the period ended April 3, according to FactSet data.
A stronger dollar can make assets priced in the currency, like gold, more expensive to overseas buyers
“Gold hit a two month low today and remains under pressure as support for the dollar continues to grow,” wrote Craig Erlam, senior market analyst at Oanda, in a Thursday research note. “The yellow metal clearly has not lost its correlation with risk,” he said but noted that the dollar is “continuing to be the preferred save haven during times of turbulence.”
December gold was down $10.60, or 0.6%, at $1,857.50 an ounce, deepening its slide toward the lowest level since July 22, after declining 2.1% on Wednesday.
“The next barrier to the downside is $1,800, which could provide some support in the near-term,” Erlam wrote.
December silver tumbled $1.03, or $4.4%, at $22.07 an ounce, following its 5.8% tumble in the previous session, which also marked its lowest levels since late July, according to FactSet data.
Gold and silver remained lower after a weekly reading of those seeking unemployment benefits, used as a running gauge of the health of the economy amid the viral pandemic, came in somewhat weaker than expected.
Jobless claims rose 4,000 to 870,000, the Labor Department said Thursday.Economists surveyed by MarketWatch had been looking claims to decline to 850,000, reflecting that slightly more Americans applied for state unemployment benefits in the week ended Sept. 19 than in the prior week. Claims in the prior week were raised by 6,000 to 866,000.