Gold falls below $1,800 per ounce on firm dollar, ECB policy pause
· Gold fell below the key $1,800 level on Thursday as the dollar strengthened and the European Central Bank kept its monetary policy on hold, prompting some investors to lock in profits.
· Spot gold fell 0.8% to $1,796 per ounce. U.S. gold futures settled down 0.7% to $1,800.30.
· “The key narrative is that central banks are on hold for some time and more stimulus is coming but it’s going to be much later. That’s taking a little bit of the bullish trend that gold has firmly been in recently,” said Edward Moya, senior market analyst at broker OANDA.
· ECB President Christine Lagarde said the central bank will use its stimulus firepower fully even as the euro zone economy shows some signs of rebounding from its pandemic-induced recession.
Also weighing on prices, the dollar edged 0.3% higher, making bullion expensive for holders of other currencies.
· “Some investors are locking profits but medium to long investors are firmly maintaining their position and they’re looking to buy on any significant dip,” Moya added.
· Spot gold price hit $1,817.71 an ounce, its highest since September 2011, last week and has risen 18% so far this year.
· Bullion, widely considered a hedge against inflation and currency debasement, has gained on the back of massive stimulus measures and low interest rates, although market participants are still divided on the outlook for inflation.
· The rise in U.S.-China tensions and an uptick in coronavirus infections in some major economies is keeping gold fundamentally supported, said Kitco Metals senior analyst Jim Wyckoff.
· The recent surge in COVID-19 cases in the United States has forced states such as California to shut down again, sparking fears of more business damage.
· In other metals, palladium rose 0.4% to $1,988.92 an ounce, while platinum lost 1.2% at $822.42, and silver slipped 1.2% to $19.15.
Reference: CNBC
Thai
Eng