Gold eases off record as dollar regains momentum

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August 7, 2020

Gold’s record-breaking rally paused on Friday as the dollar got some respite from investors looking for a hedge against the U.S.-China spat, but fears over a worsening pandemic kept bullion on track for its longest streak of weekly gains in about a decade.

Spot gold eased 0.2% to $2,058.55 per ounce by 0945 GMT, having scaled a record peak of $2,072.50 in early trade. It has added 4% so far this week in what would be its ninth straight weekly gain.

U.S. gold futures were steady at $2,070.20.

“We’ll see some pullback (in gold) from these levels with USD bottoming for a while and maybe even see some strength in the USD in the near term, which will reverse these gains but not entirely,” said Spencer Campbell, director at SE Asia Consulting Pte Ltd.

“People will be looking to re-enter the market on any pullbacks in precious metals as the medium to longer term views are significantly higher.”

The dollar rebounded from a two-year low as President Donald Trump’s decision to ban U.S. transactions with two popular Chinese apps weighed on risk sentiment.

The U.S. currency has in many instances been the preferred refuge during the flare-ups between Washington and Beijing.

“The dollar’s performance has a major say on how much runway gold bulls are accorded,” said FXTM market analyst Han Tan.

Gold has surged more than 35% this year amid surging COVID-19 cases that have battered economies and prompted unprecedented global stimulus measures.

“There would have to be a paradigm shift in the outlooks for global monetary policy and the worldwide economy, before considering whether gold’s surge has run its course,” Tan added.

Investors now await the U.S. non-farm payrolls data due at 1230 GMT.

Elsewhere, silver was down 2.2% at $28.30, having earlier hit a high since February 2013. It has gained about 16% so far this week.

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Elsewhere, platinum dropped 2.8% to $970.31 an ounce and palladium fell 1.7% to $2,183.70.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

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Gold eases off record as dollar regains momentum

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