Gold prices retreat as U.S. dollar firms


Gold futures retreated on Tuesday from the highest close in about a week, as the precious metal followed a bounce in the U.S. dollar which can weigh on commodities priced in the currency.

The U.S. dollar was up 0.2% on Tuesday, as measured by the ICE U.S. dollar index
DXY,
+0.18%,
a gauge of the buck against a half-dozen currencies.

August gold
GCQ20,
-0.40%
was $7.50, or 0.4%, lower at $1,786 an ounce, after rising amodest 0.2% on Monday, enough to mark its highest finish since June 30.

Meanwhile, September silver
SIU20,
-1.14%
gave up 22 cents, or 1.2%, to reach $18.36 an ounce, relinquishing a large chunk of its 1.4% gain on Monday.

Precious metals silver and gold have benefited from safe haven appetite during the COVID-19 pandemic that has undermined global economic growth and elicited unprecedented stimulus from central banks and governments world-wide. That environment is seen keeping interest rates low and driving appetite for metals, bullish experts say.

“There is no doubt that traders are pouring money in gold [exchange-traded funds] for the gold demand has strengthened due to virus concerns,” wrote Naeem Aslam, chief market analyst at AvaTrade, in a Tuesday report.

“Falling interest rates around the globe, and the weaker dollar are keeping the rally alive for the gold price,” he wrote.

The 10-year Treasury note yield
TMUBMUSD10Y,
0.670%
has been kept in a range at around 0.70%, with such relatively low rates stoking appetite for bullion which doesn’t bear a coupon.



Source link