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Gold Prices Fall on Stronger Dollar; Hovers Near 2-week Low

Gold Prices Fall on Stronger Dollar; Hovers Near 2-week LowGold prices fell on a firmer dollar on Wednesday

Investing.com – Gold prices fell on a firmer dollar on Wednesday and traded near two-week lows.

Upbeat U.S. economic data was said to be driving global equities and the dollar higher this week, as Chinese and Japanese stocks rose more than 1% on Wednesday, while the dollar traded 0.5% higher against a basket of other currencies.

The gained 0.5% to 96.82 and hovered near 16-month highs. The index hit 97.02 on Tuesday, its highest level since June 2017 as U.S.-Sino trade tensions once again turned investors towards the greenback, which like gold has begun a steady ascent ahead of a widely-expected U.S. rate hike in December.

The White House upped the ante against China this week, warning that it could impose by early December tariffs on all remaining Chinese goods entering the U.S. if talks next month between President Donald Trump and his Chinese counterpart Xi Jinping fail to ease their trade war. Washington has already imposed tariffs on $250 billion worth of Chinese goods, and China has responded with retaliatory duties on $110 billion worth of U.S. imports.

for December delivery on the Comex division of the New York Mercantile Exchange was down 0.55% at $1,218.6 a troy ounce by 1:40 AM ET (05:40 GMT). The yellow metal has risen about 2.4% so far in October, the biggest monthly gain since January.

“If the dollar continues to march higher, especially against its emerging markets peers, this will put some pressure on gold,” said Hussein Sayed, Chief Market Strategist at FXTM.

“As long as inflation doesn’t become a real threat or equities plunge much further from current levels, many investors will prefer yielding instruments than investing in gold, and that’s what the dollar is providing.”

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Source: Investing.com

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