24.2 C
New York
Wednesday, July 6, 2022

Gold Loses $1,300 Perch as Dollar Steals China Safe-Haven Bids

Gold Loses ,300 Perch as Dollar Steals China Safe-Haven Bids

Investing.com – The dollar is pulling the rug from under gold on China fears, sending the yellow metal below the $1,300 line gold bugs had defended the past five weeks.

Reversing course from a late-February pummeling, the greenback is back in control of its narrative as the best hedge to the unresolved U.S-China trade war.

Any run-up in the dollar tends to take shine off gold, its direct rival.

for April delivery settled down $16.90, or 1.3%, at $1,299.20 per ounce on the Comex division of the New York Mercantile Exchange, easing for a fifth-straight day. It was the first time gold had lost its $1,300 perch since Jan. 20.

, reflective of trades in physical bullion, slid by $20.18, or 1.5%, to $1,293.01 per ounce by 2:20 PM ET (19:20 GMT).

The , which measures the greenback against a basket of six currencies, was up 0.4% at 96.458, after scaling 96.403 earlier, a peak since Feb. 25.

While investors have been using gold as a hedge toward the U.S.-China negotiations, the dollar has proven to be a more effective safe-haven play for this, gaining traction at the expense of gold after U.S. Trade Representative Robert Lighthizer admitted the Trump administration was having problems reaching closure in its tariff war with Beijing.

Some professed surprise over gold’s collapse on Friday despite recent aggressive buying of bullion by central banks on worsening worries over Brexit and other global economic developments.

“I think this selloff is overdone and I expect the selloff to run out of gas and the price to recover,” said Walter Pehowich, executive vice president at Dillon Gage Metals in Addison, Texas.

“For the gold bugs who use dollar cost averaging to play in the gold market, this pullback is just another opportunity to take advantage of a product that still has upside potential,” Pehowich said. “Significant global debt, trade disputes, a pause on rate hikes and a slowing economy should help the price in the long run.”

Prices of palladium, meanwhile, rose for a second-straight day, maintaining the auto-catalyst metal’s standing as the world’s most valuable traded metal.

The was up $3.90, or 0.3%, at 1,547.30 per ounce by 2:20 PM ET (19:20 GMT), after scaling $1,563.45 earlier. On Wednesday, spot palladium hit a record high of $1,569.40 as investors ploughed into the metal due to its shrinking supplies.

Trades in other Comex metals as of 2:20 PM ET (19:20 GMT):

up $2.20, or 0.2%, at $1,503.70 per ounce.

down $14.50, or 1.7%, at $860.70 per ounce.

down 41 cents, or 2.6%, at $15.13 per ounce.

down 2 cents, or 0.6%, at $2.97 per pound.

Source: Investing.com

Related Articles

Stay Connected

11,296FansLike
12,893FollowersFollow
751FollowersFollow
- Advertisement -

Latest Articles

Popular Articles