“We’d really need to see a much lower US dollar for gold to get a sustained positive kick going forward,” Lennox said. “Investors are turning more to the greenback than bullion as a haven asset.”
The Bloomberg Dollar Spot Index gained 0.9% to its highest level on record, eclipsing the 2020 peak from the Covid-19 pandemic.
Gold prices have been volatile this year as Russia’s invasion of Ukraine spurred a rally to well above $2,000 an ounce in March, only for the momentum to fade as the growth and inflation outlook shifted. In recent weeks, investors have cut holdings in bullion-backed exchange-traded funds.
The strong dollar is weighing on bullion price “as are the higher interest rate expectations,” Commerzbank AG analyst Daniel Briesemann said in an interview.
“A Fed rate hike of 100 basis points at the next meeting is being priced in, according to the Fed Fund Futures,” Briesemann said. “In such an environment gold can still go lower.”
Spot gold was down 1.6% to $1,707 at 3:54 p.m. in London. Platinum and palladium fell, with silver leading at a 4.7% decline.
Become an Insider
Comments - share your knowledge and experience
Please note you must be a Maverick Insider to comment. Sign up here or sign in if you are already an Insider.
Everybody has an opinion but not everyone has the knowledge and the experience to contribute meaningfully to a discussion. That’s what we want from our members. Help us learn with your expertise and insights on articles that we publish. We encourage different, respectful viewpoints to further our understanding of the world. View our comments policy here.
No Comments, yet