(Reuters) – Gold prices fell Tuesday as the dollar strengthened on growing concerns about mutant coronavirus strain in the UK, while market response to the recently expected U.S. economic stimulus package ‘limiting bullion loss.
Spot gold with a 0.1% lower edge to $ 1,873.76 per ounce by 1011 GMT, U.S. gold futures fell 0.2% to $ 1,879.20.
“The weakness we are seeing now is driven by year-end profit taking, but it is also driven by the fact that we have seen the dollar strengthen as risk markets recover. ‘become more at risk with the latest COVID news from the UK,’ said Saxo Bank Analyst Ole Hansen.
The dollar index was sharply burned, holding near a higher level than a week as Britain remained isolated from COVID-19 due to a new highly contagious coronavirus strain. [USD/]
Bullion hit a six-week high of $ 1,906.46 Monday, backed largely by the U.S. Congress’s approval of $ 892 billion in coronavirus aid to support the dispersed economy, the President is expected to Donald Trump signs package to law soon.
Gold has climbed 23% this year, aided by a number of pandemic stimulus measures that scared inflation. The precious metal is often used as a hedge against inflation.
On the technical front, gold may look back on Nov. 30 low of $ 1,764.29 per ounce next quarter, according to Reuters analyst Wang Tao.
In other metals, silver fell 0.9% to $ 25.93 an ounce, but closed to a peak more than three months ago in the previous session.
“(Silver) monitors gold, it also got the extra measure of support from the rally we saw in the metals industry. Green transformer steam is attached to it, as increased demand for solar panels is expected next year, ”said Hansen at Saxo Bank.
Platinum fell 0.1% to $ 1,008.12, while palladium rose 0.3% to $ 2,315.58.
Reporting by Asha Sistla in Bengaluru, edited by Louise Heavens