Gold prices fell on Thursday after the U.S. dollar strengthened and the European Central Bank left interest rates unchanged.
Gold for December delivery settled down 0.6% at $1,341.60 a troy ounce on the Comex division of the New York Mercantile Exchange, reversing course after trading as high as $1,352.50 earlier in the session. The drop marked the second consecutive day of losses for the precious metal.
The ECB’s decision to keep rates unchanged sparked selling in government bonds and a rise in yields, which put pressure on gold prices, said Tai Wong, head of base and precious metals trading at BMO Capital Markets.
ECB President Mario Draghi “ kept his weapon in the holster today,” said Mr. Wong. “The higher interest rates created a little bit of a correction in gold.”
Higher interest rates tend to weigh on gold, which pays its holders nothing and struggles to compete with yield-bearing assets when borrowing costs rise.
The WSJ Dollar Index, which measures the dollar against a basket of other currencies, was recently up 0.3% at 86.13. A stronger dollar is typically bearish for gold, because it makes the dollar-denominated commodity more expensive for investors who hold other currencies.
The strength of the dollar has been a driving factor for the gold price for the past few weeks, acting as a signal for expectations on the timing of a future U.S. rate increase, said Carsten Menke, a commodities research analyst at Julius Baer.
Read more - https://www.goldcruderesearch.com/comex.php
Gold for December delivery settled down 0.6% at $1,341.60 a troy ounce on the Comex division of the New York Mercantile Exchange, reversing course after trading as high as $1,352.50 earlier in the session. The drop marked the second consecutive day of losses for the precious metal.
The ECB’s decision to keep rates unchanged sparked selling in government bonds and a rise in yields, which put pressure on gold prices, said Tai Wong, head of base and precious metals trading at BMO Capital Markets.
ECB President Mario Draghi “ kept his weapon in the holster today,” said Mr. Wong. “The higher interest rates created a little bit of a correction in gold.”
Higher interest rates tend to weigh on gold, which pays its holders nothing and struggles to compete with yield-bearing assets when borrowing costs rise.
The WSJ Dollar Index, which measures the dollar against a basket of other currencies, was recently up 0.3% at 86.13. A stronger dollar is typically bearish for gold, because it makes the dollar-denominated commodity more expensive for investors who hold other currencies.
The strength of the dollar has been a driving factor for the gold price for the past few weeks, acting as a signal for expectations on the timing of a future U.S. rate increase, said Carsten Menke, a commodities research analyst at Julius Baer.
Read more - https://www.goldcruderesearch.com/comex.php
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