Gold dips on stronger dollar
Metal slips, but growing fear over the global economic recovery from the coronavirus crisis limits the fall
Bengaluru — Gold prices slipped on Tuesday, weighed down by a stronger dollar, but the safe-haven metal’s decline was limited by the growing fear over the global economic recovery from the coronavirus crisis.
Spot gold was down 0.2% at $1,925.09/oz by 3.20am GMT. US gold futures fell 0.2% to $1,931.20.
“Over the past 24 hours we have seen a stronger US dollar that is something that has weighed a little bit on gold,” said DailyFx currency strategist Ilya Spivak.
“The $1,900 level in very important for gold right now here.”
The dollar index rose against its rivals, making gold more expensive for holders of other currencies.
Hope around swift economic recovery faded after data showed that Japan’s economy shrank more than initially estimated in the second quarter as capital expenditure took a hit from the pandemic.
Governments and major central banks have flooded the markets with unprecedented stimulus measures to mitigate economic damage from the virus, driving gold to new highs because of its role as a hedge against inflation and currency debasement.
Market participants’ focus will now be on the European Central Bank’s (ECB) policy decision on Thursday to see if policymakers add yet more stimulus.
On the trade front, President Donald Trump on Monday again raised the idea of decoupling the US economy from China, suggesting the US would not lose money if the world’s two biggest economies no longer did business.
Spot gold is poised to break a support at $1,923/oz and fall into $1,880-$1,906 range, said Reuters technical analyst Wang Tao.
Elsewhere, silver fell 0.8% to $26.78/oz and platinum eased 0.1% to $906.74, while palladium edged 0.1% higher to $2,296.80.
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