Gold Price Today August 12 2020 Spot Gold Rate Falls Below $1,900 Per Ounce As US Dollar RisesPage Visited: 9
Gold fell below the $1,900 per ounce level on Wednesday as a resurgent dollar prompted investors to reassess their positions after a record-breaking price rally. Spot gold declined as much as 2 per cent to a near three-week low of $1,872.19 per ounce, resuming its free fall after a brief hiatus in early trade. It was down 1.1 per cent at $1,889.59 per ounce by 0330 GMT (9:00 am in India), extending losses after a 6 per cent plunge on Tuesday. US gold futures slid 2.4 per cent to $1,900 per ounce.
Silver too joined the slide, falling 2.8 per cent to $24.11 per ounce after a 15 per cent slump in the previous session.
“It looks like some of the euphoria is coming out of the gold market,” with a test of support around $1,800 now looking possible, IG Markets analyst Kyle Rodda said.
“A lot hinges on US yields and the factors driving them at the moment. Also, dollar’s strength will be something very important to watch over the next few days and weeks.”
A jump in US Treasury yields helped the dollar extend its winning streak, making gold more expensive for those holding other currencies. Higher yields also increase the opportunity cost of holding non-yielding gold.
Gold suffered its biggest one-day drop in more than seven years on Tuesday as equities surged and the dollar firmed. However, growing uncertainty about a US stimulus deal weighed on Asian stocks on Wednesday.
Bullion’s gains for the year now stood at about 25 per cent, as investors buy the metal as a hedge against a coronavirus-driven slowdown and fears of currency debasement as central banks flood the economy with money to ease the blow.
With central bank policies likely to remain “loose for the foreseeable future,” gold could move back towards $2,000, said ING analyst Warren Patterson.
Platinum lost 1 per cent to $920.86 and palladium eased 0.4 per cent to $2,082.90.