August 11, 2020
Gold makes hasty retreat as dollar holds on to gains
(Reuters) - Gold fell on Tuesday as dollar’s relative value against other currencies recovered, spurring some investors to lock in gains in bullion, which has soared to record levels of $2,000 per ounce.
Spot gold was down 0.5% to $2,017.53 per ounce, retreating from a record high of $2,072.50 hit last week. U.S. gold futures fell 0.6% to $2,026.90.
“A stronger dollar and favourable risk sentiment are weighing on gold. Prices are undergoing a period of consolidation after rising more than 14% in three weeks,” said DailyFx strategist Margaret Yang.
The dollar held on to overnight gains as investors clung to hopes of a stimulus deal in Washington and U.S. bond yields rebounded from multi-month lows.
Asian stocks, meanwhile, shrugged off the latest flare-up between Washington and Beijing.
China on Monday imposed sanctions on 11 U.S. citizens, including lawmakers from President Donald Trump’s Republican Party, after Washington’s sanctions on Hong Kong and Chinese officials last week.
Analysts said gold’s overall appeal was intact, with prices up more than 33% so far this year.
“Gold trade attracted a lot of fast money last week, and I believe a washout of speculative long positioning sets gold up for a more balanced rally going forward,” said Jeffrey Halley, a senior market analyst at OANDA.
The metal has been one of the most consistent gainers through the six months of coronavirus-led turmoil in financial markets, benefiting from a flood of capital into the world economy and investors seeking a relatively safe location to park money with interest rates at or near zero.
Prices may break a support at $2,017 and fall to $2,000 per ounce, said Reuters technical analyst Wang Tao.
Silver dropped 1% to $28.86 per ounce and platinum fell 0.8% to $979.12, while palladium rose 0.7% to $2,234.90.