Economy News

Gold prices dip as dollar rises to pandemic high

By Bharat Gautam

(Reuters) – Gold prices fell on Wednesday as the dollar consolidated at its highest level in more than two years and pressured demand for greenback-priced bullion.

Spot gold was down 0.4% at $1,898.48 per ounce, as of 0353 GMT. U.S. gold futures slid 0.3% to $1,899.00.

“So, $1,900 is clearly a pivotal level for today’s session … looking further out, it’s not looking ideal at the moment with the U.S. dollar at a 25-month high,” trading firm City Index’s senior market analyst Matt Simpson said.

The dollar stood at its highest level since the early days of the pandemic and was heading for its best month since 2015, supported by the prospect of aggressive U.S. rate hikes and on safe-haven flows fanned by slowing growth in China and Europe. [USD/]

A stronger dollar makes greenback-priced gold less attractive for other currency holders. The greenback is also seen as a rival safe-haven asset to gold during economic and political crises.

Headlines from Russia provided some support to gold on Tuesday as investors sought a safe haven, but the Ukraine crisis has not been as much of a bullish story recently as it was a few weeks ago, and is unlikely to last through the week, Simpson said.

Russia halted gas supplies to Poland under the Yamal contract on Wednesday, data from the European Union network of gas transmission operators showed, in a deepening of the rift between the West and Russia over the conflict in Ukraine.

A sell-off in global stocks extended to Asia morning trade as growing fears about the global economy forced investors to dump riskier assets in favour of safe havens such as the dollar and government bonds. [MKTS/GLOB]

Spot silver gained 0.1% to $23.51 per ounce, platinum dipped 0.1% to $920.02, and palladium firmed 0.6% to $2,198.48.

Source : Reuters

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