Monday, May 27, 2024
Home > Commodity > Gold’s record breaking rally sputters on dollar bounce-back

Gold’s record breaking rally sputters on dollar bounce-back


Gold slumped over 2% on Friday, snapping its record-breaking rally, after a decent U.S. jobs report boosted the dollar, but a worsening pandemic kept prices on course for their longest streak of weekly gains in about a decade.

Spot gold fell 1.4% to $2,033.89 per ounce by 2:46 p.m. EDT (1846 GMT), after hitting a record high of $2,072.50. It has added 3% so far this week for what would be its ninth straight weekly gain.

U.S. gold futures settled down 2% at $2,028.

“The dollar rebounded quite strongly after the jobs report. That clearly caused a sell-off across the board in the metals sector,” said David Meger, director of metals trading at High Ridge Futures.

“The thought process would be that with the slightly better than expected jobs number, the economy is slowly regaining its footing and, hypothetically, we would then see a lesser need for stimulus.”

The dollar rebounded from two-year lows after data showed U.S. nonfarm payrolls increased 1.763 million in July against a record rise of 4.791 million in June and on renewed U.S.-China tensions.

Further weighing on gold was an impasse in the new U.S. coronavirus aid bill.

“Once they agree on a stimulus it’ll be bearish for the dollar. The global economy is still very wobbly and as a result we’re going to get a lot more easy money, so all that is tailwind for gold,” said Edward Meir, analyst at ED&F Man Capital Markets.

Gold can still end the year at $2,200-$2,300, he added.

Bullion has risen 34% this year amid surging COVID-19 cases, which have battered global economies and prompted unprecedented stimulus measures.

Elsewhere, silver slid 3% to $28.07 per ounce, having earlier hit its highest since February 2013 at $29.84. It has gained 15.5% so far this week.

Platinum dipped 4.1% to $957.36, while palladium declined 2.9% to $2,156.97.


Source link

Leave a Reply

Your email address will not be published. Required fields are marked *