Gold pulls back from record high on profit-taking, dollar strength

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August 3, 2020

Gold prices retreated from a record high on Monday after investors booked some profits and the dollar rose, although concerns over rising coronavirus cases and its impact on global economy limited bullion’s losses.

Spot gold fell 0.4% to $1,967.87 per ounce at 10:13 am EDT (1413 GMT), having earlier hit a record high of $1,984.66. U.S. gold futures were down 0.5% at $1,975.40.

“Over the past two weeks we’ve had such a climb in gold, it’s going up so fast that you’re going to see people wanting to digest or take some profits,” said Michael Matousek, head trader at U.S. Global Investors, adding that a rising dollar was also weighing on prices.

Bullion has surged about 30% so far this year, supported mainly by lower interest rates and widespread stimulus measures by global central banks to ease the economic blow from the pandemic.

The dollar was up 0.5% against rivals, making assets priced in the U.S. unit more expensive for holders of others currencies, while U.S. stocks also gained.

Investors’ were also keeping a close eye on the new U.S. stimulus plan that lawmakers are struggling to hammer out.

“We see a lot of people anticipating once that (stimulus) comes out, more bids will come into gold,” Matousek said.

Virus cases have topped 18 million globally, with major cities announcing fresh restrictions to curb infections.

“There’s no doubt that the backdrop remains highly constructive, with negative real yields for the foreseeable future. We’ve subsequently revised up our 6–12 month target to $2,300 per ounce,” ANZ analysts wrote in a note dated Friday.

“Even so, we’re mindful that if economic sentiment improves in coming quarters, the hurdle for continued growth in investor demand may make the path to this level an arduous one.”

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Elsewhere, silver eased 0.6% to $24.21 per ounce, platinum rose 0.7% to $913.48, and palladium was unchanged at $2,090.90.

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 pulls back from record high on profit-taking, dollar strength

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