Gold dips on stronger dollar ahead of ECB meeting
· Gold prices slipped on Wednesday as the U.S. dollar rose to multi-week highs ahead of monetary policy strategies from major central banks in North America and Europe.
· Spot gold was down 0.3% to $1,925.20 per ounce by 0239 GMT. U.S. gold futures fell 0.4% to $1,935.20.
· “Gold is edging lower as the U.S. dollar’s strength continues. A deeper correction below $1,900 cannot be ruled out if the dollar stays strong and gold buyers decide to hold off increasing longs at these levels now,” said Jeffrey Halley, a senior market analyst at OANDA.
· “Traders in Asia will adopt a cautious tone, preferring to wait for New York to open and clearer evidence as to whether the USD rally and stock market sell-off will continue.”
· The dollar index jumped to a near one-month high against its rivals, making gold more expensive for holders of other currencies.
· Offering some respite to gold, a sell-off in technology shares sent Wall Street to its third consecutive session of declines, and a major drugmaker delayed testing of a Covid-19 vaccine.
· Investors’ focus now shifts to the European Central Bank policy meeting due on Thursday. While no major policy moves are expected since it has acted aggressively to shore up the virus-hit economy, investors will watch out for its inflation forecasts.
· Gold is used as a hedge against inflation and currency debasement.
· Market players also awaited the policy meeting of the Bank of Canada on Wednesday, while the U.S. Federal Reserve’s next meeting is scheduled for next week.
· Elsewhere, platinum was down 0.4% to $897.94 per ounce. On Tuesday, the World Platinum Investment Council changed its forecast for the market in 2020 from a surplus to a deficit.
· Silver dropped 0.8% to $26.48 per ounce, while palladium was flat at $2,274.63.
Reference: CNBC
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