Gold & Silver

Gold falls to near two-month low as robust dollar weighs

Reuters Bengaluru | Updated on October 01, 2019 Published on October 01, 2019

Representative image

Spot gold was down 0.4 per cent at $1,465.80 per ounce

Gold prices fell to a near two-month low on Tuesday, weighed down by a stronger dollar, while hopes of progress in the United States (US)-China trade talks lifted equity markets in a further hit to the bullion's appeal.

Trading was thin in Asian hours as traders in top consumer China went for a long public holiday.

Spot gold was down 0.4 per cent at $1,465.80 per ounce, as of 0456 GMT, after declining to its lowest since August 6 at $1,462.44 earlier in the session. US gold futures were 0.1 per cent lower at $1,471.80 per ounce.

The dollar's potential to gain further and some optimism around a potential trade deal between Washington and Beijing weighed on gold, said Michael McCarthy, chief market strategist at CMC Markets.

“We also broke through the $1,480-$1,490 support level and on a technical basis that in itself is enough to spur further selling,” he said.

The dollar index against a basket of six major currencies climbed to a more than two-year high, as investors waited for September US manufacturing data to determine how far policy-makers will go to bolster growth.

Asian shares ticked up as some investors clung to hopes that the fourth quarter will bring progress in resolving the US-China trade war that has cast a shadow over the global economy.

Meanwhile, White House trade adviser Peter Navarro dismissed reports that the Trump administration was considering de-listing Chinese companies from US stock exchanges as “fake news”.

China and the US are due to resume high-level trade talks next week in Washington. While the tussle over trade and technology between the world's two largest economies has intensified, some investors are sticking to hopes of a compromise.

“We're unlikely to see this rather complex and difficult situation resolve anytime this year. If both sides appear to accept a partial settlement that could be good news,” McCarthy said.

On the technical front, spot gold may break a support at $1,462 per ounce and fall towards $1,446, according to analysts.

Holdings at SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.22 per cent to 920.83 tonnes on Monday.

Among other precious metals, deficit-hit palladium was little changed at $1,675.29 per ounce, having scaled a record peak of $1,700.71 on Monday.

Platinum was down 0.1 per cent at $881.37 per ounce. Silver was 0.1 per cent lower at $16.97, after hitting its lowest since August 20 at $16.87 earlier in the session.

Published on October 01, 2019
  1. Comments will be moderated by The Hindu Business Line editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.