Gold Retreats From Multi-year Peak as Dollar Rebounds
Gold fell on Tuesday in the face of competition from safe haven inflows into the dollar as COVID-19 cases increased globally and investors booked profits following bullion’s rally to a near eight-year peak.
Spot gold fell 0.4% to $1,776.43 per ounce by 959 GMT. It earlier touched a high of $1,786.91, $2.05 shy of Wednesday’s near eight-year peak of $1,788.96. U.S. gold futures fell 0.5% to $1,784.00 per ounce.
“Even though the underlying support remains strong and (gold) demand is still on the up, the fact that we’re so close to a key level of resistance has attracted some light profit-taking... coronavirus news is not strong enough to add some additional support,” Saxo Bank analyst Ole Hansen said to Reuters.
The gold market needs a weaker dollar to make a clean break towards $1,800, Hansen added.
Record increases in novel coronavirus infection in the United States has prompted cities to roll back reopening plans, while India, also the world’s second biggest gold consumer, on Monday overtook Russia to record the world’s third-highest number of COVID-19 cases.
Commerzbank said in a note the rise in India was likely to keep the physical market subdued.
“The strict curfew in India means that hardly any gold has been sold or imported there for months,” it said.
The dollar .DXY rebounded from a two-week low, while European equities fell in response to the U.S. coronavirus infection surge and forecasts for a deeper-than-feared euro zone recession.
“We seem to be bouncing between days of v-shaped optimism and second wave anxiety, creating this very jittery market and we’re seeing that in gold as well,” OANDA analyst Craig Erlam said.
Elsewhere, palladium dropped 1.03% to $1,919.37 per ounce, while platinum rose about 1% to $821.17 per ounce.
“Weak sales will keep auto catalyst demand soft this year,” ANZ analysts said in a note.
Silver shed about 1% to $18.03 per ounce.
Neha writes articles on sectors including medicine, food, materials, and science & technology. A qualified statistician, she has the ability to observe and analyze the trends in global markets and write compelling articles that help CXOs in decision making. She is a bookworm and loves to read fiction, lifestyle, science and technology. Neha comes with 6 years of experience in content writing and editing that involves blog writing, preparation of study materials and OERs.