Gold languishes at two-month low as dollar rallies | The Daily Star
12:00 AM, September 25, 2020 / LAST MODIFIED: 02:05 AM, September 25, 2020

Gold languishes at two-month low as dollar rallies

Gold fell on Thursday to its lowest level in more than two months, crippled by a robust dollar, while investors fretted over uncertainties surrounding further stimulus measures to support a sluggish economy in the United States.

Spot gold fell 0.3 per cent to $1,857.36 per ounce at 0747 GMT. Earlier in the session, it hit its lowest since July 22 at $1,847.99. US gold futures were down 0.4 per cent at $1,860.70.

The dollar index hit a two-month peak against rival currencies. A firmer dollar makes bullion more expensive for holders of other currencies.

"Gold can't shake off this dollar dominance, that is reverberating across all asset classes," said Edward Moya, a senior market analyst at OANDA.

Meanwhile, US Federal Reserve officials tried to convince investors they will keep monetary policy easy for years to allow unemployment to fall, but analysts say immediate support is unlikely before the US elections.

"The stimulus side of this trade is looking rather bleak in the short term," Moya said.

Optimism over a nascent economic recovery soured as data showed business activity in the United States and Europe cooled in September as the pandemic continued to batter activities.

 "We might see gold decline to $1,800-$1,780 on the downside, but beyond that once markets start focusing on its safe-haven appeal, gold should start to rally again," said Harshal Barot, senior research consultant for South Asia at Metals Focus.

Investors are now awaiting US weekly jobless claims data, due later in the day, which is expected to show claims fell slightly but remained at high levels.

Elsewhere, silver fell as much as 5.4 per cent to $21.64, its lowest in more than two months, and was last down 2.9 per cent at $22.21. Platinum firmed 0.5 per cent to $842.50 per ounce and palladium was flat at $2,221.13.

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