Gold slides on stronger dollar due to China’s Covid-19 bars
Prices of the bullion have been tracking the greenback’s moves closely, and rising uncertainty from the unrest seems to be underpinning it, analyst says
28 November 2022 - 08:04
byAshitha Shivaprasad
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Bengaluru — Gold prices slipped on Monday, as the dollar strengthened on safe-haven demand triggered by protests in several Chinese cities over the country's strict Covid-19 restrictions.
Spot gold was down 0.4% at $1,749.00 per ounce at 5.14am. US gold futures fell 0.2% to $1,749.90.
The dollar index was up 0.4%, making the greenback-priced bullion more expensive for buyers holding other currencies.
“Gold prices have been tracking the US dollar's moves closely, and increased uncertainty from the growing unrest in China seems to be underpinning the dollar this morning,” said IG market strategist Yeap Jun Rong.
Hundreds of demonstrators and police clashed in Shanghai on Sunday night as protests over China's stringent Covid-19 restrictions flared for a third day and spread to several cities after a deadly fire in the country's far west.
Meanwhile, China on Monday reported a fifth consecutive daily record of new local coronavirus cases. Megacities Guangzhou and Chongqing are struggling to contain outbreaks while hundreds of infections were recorded in several cities across the country on Sunday.
People may be shifting to defensive assets considering the Covid-19 situation in China, but the dollar's gains are now overshadowing gold's safe-haven status, Yeap said.
Next on investor radar is Federal Reserve chair Jerome Powell's Wednesday speech on the US economy and labour market for clues on the monetary policy outlook.
A majority of market participants are pricing in a 50 basis-point increase at the Fed's December meeting after minutes of the last policy meeting signalled a slower pace of hikes.
Higher interest rates increase the opportunity cost of holding the non-yielding metal.
The ADP National Employment report and the US Labor Department's nonfarm payrolls data due later this week will also be scanned for their likely influence on the Fed's rate-hike strategy.
Silver slipped 1.8% to $21.21, platinum fell 0.3% to $978.00 and palladium declined 0.3% to $1,846.94.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Gold slides on stronger dollar due to China’s Covid-19 bars
Prices of the bullion have been tracking the greenback’s moves closely, and rising uncertainty from the unrest seems to be underpinning it, analyst says
Bengaluru — Gold prices slipped on Monday, as the dollar strengthened on safe-haven demand triggered by protests in several Chinese cities over the country's strict Covid-19 restrictions.
Spot gold was down 0.4% at $1,749.00 per ounce at 5.14am. US gold futures fell 0.2% to $1,749.90.
The dollar index was up 0.4%, making the greenback-priced bullion more expensive for buyers holding other currencies.
“Gold prices have been tracking the US dollar's moves closely, and increased uncertainty from the growing unrest in China seems to be underpinning the dollar this morning,” said IG market strategist Yeap Jun Rong.
Hundreds of demonstrators and police clashed in Shanghai on Sunday night as protests over China's stringent Covid-19 restrictions flared for a third day and spread to several cities after a deadly fire in the country's far west.
Meanwhile, China on Monday reported a fifth consecutive daily record of new local coronavirus cases. Megacities Guangzhou and Chongqing are struggling to contain outbreaks while hundreds of infections were recorded in several cities across the country on Sunday.
People may be shifting to defensive assets considering the Covid-19 situation in China, but the dollar's gains are now overshadowing gold's safe-haven status, Yeap said.
Next on investor radar is Federal Reserve chair Jerome Powell's Wednesday speech on the US economy and labour market for clues on the monetary policy outlook.
A majority of market participants are pricing in a 50 basis-point increase at the Fed's December meeting after minutes of the last policy meeting signalled a slower pace of hikes.
Higher interest rates increase the opportunity cost of holding the non-yielding metal.
The ADP National Employment report and the US Labor Department's nonfarm payrolls data due later this week will also be scanned for their likely influence on the Fed's rate-hike strategy.
Silver slipped 1.8% to $21.21, platinum fell 0.3% to $978.00 and palladium declined 0.3% to $1,846.94.
Reuters
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