(Reuters) – Gold prices fell on Wednesday, hitting a six-week low amid continuing dollar rallies, while lack of additional stimulus to support the global economy further increased pressure on market sentiment.
The spot gold price dropped 0.61% to $ 1.887.77 per troy ounce by 02:02 PM Moscow time. Earlier in the course of trading, the quotation fell to the minimum since August 12, $ 1.873.01 per ounce.
“As long as we see the strength of the dollar, we will undoubtedly see problems in gold,” said Saxo Bank analyst Ole Hansen, adding that the decline in quotes below $ 1,900 caused some nervousness in the market.
Gold has become “passive”, all favorable factors are already included in the price, and now inflation and a weakening dollar will be required to attract new demand, the analyst added.
Positive economic data from the United States and concerns about an increase in the number of cases of coronavirus in the EU and the UK pushed the dollar index to an eight-week high, which reduced the attractiveness of gold, which is also a defensive asset.
Comments by the head of the Federal Reserve Bank of Chicago, Charles Evans, that rates could be raised before inflation in the US reaches the 2% average also influenced market sentiment, leading to lower inflation expectations and higher real yields in the US.
Palladium rose 1.11% to $ 2,245.61 an ounce, while silver slipped 3.37% to $ 23.59 an ounce. The platinum price dropped 0.41% to $ 863.19 an ounce, having previously hit its lowest level since July 21, at $ 845.5 an ounce.
(Nakul Iyer and Eileen Soreng in Bangalore. Translated by Vladimir Sadykov)