Economic news

Gold Prices See Muted Trade as Dollar’s Run-Up Steadies

Gold prices on Tuesday saw lackluster moves as the dollar’s recent jump, on the back of concerns about fresh COVID-19 lockdowns implemented in London and other parts of Europe, subsided somewhat.

Rising cases in Europe and in the U.S. have unsettled investors about the global economic recovery, driving investors into dollars, which has weighed on bullion. On top of that, investors also have unwound some of their gold holdings as a part of Monday’s equity-market turbulence, which added to the pressures around precious commodities.

European countries, including France, Spain and the U.K., are grappling with rising coronavirus numbers, and U.K. Prime Minister Boris Johnson is expected to encourage residents who can to work from home and order pubs in England to shut by 10 p.m., in a reversal from the summer relaxing of coronavirus restrictions.

Meanwhile, new cases in the U.S. on Monday rose by 52,000, marking the highest single-day increase since Aug. 14, according to Johns Hopkins University.

The U.S. dollar was recently up less than 0.1% at 93.706, as gauged by the ICE U.S. Dollar. A stronger dollar can make assets priced in the currency relative more expensive to overseas buyers using other monetary units.

“But nonetheless, the dollar appears to have trampled over gold in its comeback bid,” wrote Raffi Boyadjian, senior investment analyst at XM, in a Tuesday note. “The precious metal remains heavily skewed to the downside despite the diminishing risk appetite and looks set to breach the $1,900/oz level,” the analyst wrote.

December gold shed 70 cents, or less than 0.1%, to trade at $1,910.30 an ounce, following a 2.6% slide that marked the lowest settlement for a most-active contract since July 24, according to FactSet data.

Bullion’s price settlement on Comex on Monday pushed gold beneath its short-term, 50-day moving average at $1,941.78 an ounce — a move that is seen as contributing to a view that gold’s bullish short-term trend line was in jeopardy. Market technicians view moving averages as dividing lines between bullish and bearish momentum in an asset.

Meanwhile, December silver was 15 cents lower, or off 0.6%, at $24.23 an ounce, following a 10.1% tumble that pushed gold’s sister metal to the lowest settlement since July 31, based on the most-active contracts.

Looking ahead, Federal Reserve Chairman Jerome Powell and U.S. Treasury Secretary Steven Mnuchin will testify in front of a House committee, which could provide a fresh spark for assets on the day. 

Source: Marketwatch

To leave a comment you must or Join us

More news

Back to economic news list

By visiting our website and services, you agree to the conditions of use of cookies. Learn more
I agree