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Monday, January 24, 2022

Gold Prices Struggle to Find Footing as Dollar Rallies

Gold Prices Struggle to Find Footing as Dollar Rallies© Reuters.

Investing.com – The growing threat of an all-out trade-war between the U.S. and China drew a muted reaction in gold prices as the dollar rally kept a lid on demand for the yellow metal.

for August delivery on the Comex division of the New York Mercantile Exchange fell by $2.40 or 0.19%, to $1,277.70 a troy ounce.

China vowed to retaliate to the latest trade salvo from the White House – after Trump threatened to impose a 10% tariff on $200 billion of Chinese goods – stoking fears of trade war between the world’s two largest economies.

Yet, gold prices struggled to capture the upside enjoyed by other traditional safe-heavens such as the yen, U.S. Treasuries and the Swiss franc as investors were wary of increasing their bets on gold amid a rally in the dollar to a nearly one-year high.

The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, rose by 0.36% to 94.76.

Dollar-denominated assets such as gold are sensitive to moves in the dollar – A rise in the dollar makes gold more expensive for holders of foreign currency and thus, reduces demand for the precious metal.

Analysts at Julius Baer said they were “very surprised” that investment demand in gold has “cooled again” of late, claiming that holdings of physically-backed products reversed a quarter of this year’s growth so far in June.

In other precious metal trade, fell 0.64% to $16.34 a troy ounce, while fell 1.95% at $866.70 an ounce.

lost 1.88% to $3.05.

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Source: Investing.com

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