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Gold dips below $2,000 as dollar slide briefly halts

Filed on August 19, 2020
Gold, Gold price, uae gold


US gold futures fell 0.5 per cent to $2,002.50.

Gold fell below $2,000 an ounce on Wednesday after rising sharply in the previous session as the dollar steadied, while investors awaited minutes from the US Federal Reserve's last policy meeting.

Spot gold was down 0.4 per cent at $1,993.68 per ounce by 0253 GMT, after hitting a one-week high of $2,014.97 on Tuesday. US gold futures fell 0.5 per cent to $2,002.50.

The precious metal is priced at Dh243 for 24K, Dh228.25 for 22K, Dh218 for 21K and Dh186.75 for 18K per gram in Dubai.

"Gold is down as the US dollar strengthened slightly this morning. In the short term, a rebound in the USD might inhibit the rally in gold," said DailyFx strategist Margaret Yang.

"Gold has registered a 3 per cent gain over the past two days, rendering the metal prices vulnerable to profit-taking activities."

The dollar index steadied after hitting a more than two-year low in the last session. A stronger greenback makes gold expensive for holders of other currencies.

The dollar, also considered a safe-haven, has lost its appeal recently after the US central bank rolled out a wave of fiscal measures and cut interest rates to near zero to mitigate economic damage caused by the coronavirus outbreak.
"Given the ferocity of the US dollar sell-off, gold should find plenty of eager buyers on any dips to $1,990 during the session," said Jeffrey Halley, a senior market analyst at OANDA.

Markets are looking to the release of the Fed minutes at 1800 GMT.

"Although the Fed is not expected to indicate any new monetary stimulus initiatives in the minutes, investors would be paying attention to any change to Fed's approach to inflation that could be negative for the dollar," Phillip Futures analysts said in a note.

Meanwhile, strong corporate earnings and better-than-expected US economic data lifted risk sentiment among investors.
Elsewhere, silver eased 0.3 per cent to $27.58 per ounce. Platinum dropped 0.5 per cent to $950.63, and palladium slipped 0.7 per cent to $2,173.62.

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