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Wednesday, July 6, 2022

US MIDDAY: Gold retreats on firm dollar

NEW YORK: Gold prices fell as much as 1.5% on Tuesday, snapping a five-session long streak of gains, as the dollar firmed and strong company earnings bolstered appetite for riskier assets. Spot gold was down 0.9% at $1,790.54 per ounce by 01:46 p.m. EDT (1746 GMT). US gold futures for December delivery settled down 0.7% to $1,793.40 per ounce.

“The stronger-than-expected move in equities, with a lot of earnings on deck, is taking a bit off gold this morning,” said Bob Haberkorn, senior market strategist at RJO Futures. Strong results from tech-related companies drove the benchmark S&P 500 index to a record high during the session, taking the shine off safe-haven gold.

Also dimming bullion’s appeal for investors holding other currencies, the dollar index advanced 0.1%. Haberkorn said some gold traders could be booking profits from the recent upside move, “with equities being as strong as they are.”

Gold prices have rallied about 2.5% over the past five sessions, supported by worries over inflation and uncertainty over what measures central banks would take to combat rising prices. Analysts said gold was unlikely to stray too far from the key technical level of $1,800 per ounce, given the focus on inflation. Gold is considered a hedge against higher inflation that generally follows widespread money printing by central banks.

Focus this week will be on major central bank meetings, including those of the Bank of Japan and the European Central Bank scheduled on Thursday. The US Federal Reserve’s policy meeting is scheduled for next week.

On the technical front, a move below $1,780 would “look really bad for gold, which has been in an upward trend throughout the month,” OANDA analyst Craig Erlam said in a note. Elsewhere, silver declined 2.2% to $24.01 per ounce. Platinum fell 2.6% to $1,029.65 per ounce, while palladium slipped 2.7% to $1,995.91.

US MIDDAY: Gold retreats on firm dollar

Source: Brecorder

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