Gold hits two-month low as U.S. dollar marches higher
Gold prices dipped 1% to their lowest levels in nearly two months on Tuesday as the U.S. dollar soared ahead of economic data and comments from Federal Reserve officials that could shed light on the interest-rate path under the Trump administration.
Spot gold was down 0.3% at $2,613.7 per ounce after dropping 1% to hit its lowest since Sept. 20 at $2,589.59 earlier in the session. U.S. gold futures climbed 0.1% to $2,620.2.
“Dollar strength is weighing heavily on gold. Interestingly, the relationship seems to have dissipated for much of the year, but now it’s back in force ever since the election,” independent analyst Ross Norman said.
The dollar index rose to a four-month high, making the bullion more expensive.
The dollar is expected to benefit from some of Republican President-elect Donald Trump’s policies that will likely keep U.S. interest rates relatively higher for longer, an environment negative for non-yielding gold.
Market focus has now shifted to the October consumer price index data on Wednesday, the producer price index and weekly jobless claims on Thursday, and retail sales data on Friday.
Several central bank officials are also scheduled to speak this week, including Fed Chair Jerome Powell.
Source: Reuters
