Web
Analytics
The news is by your side.

Gold price descended to the lowest level since late January 2017

LONDON: Gold prices touched below $1,200 per ounce on Monday to their lowest since late January 2017, losing out to U.S. Treasuries and a strong dollar as investors sought refuge from a financial market rout triggered by a crashing Turkish lira.

Investors traditionally use gold as a means of preserving the value of their assets during times of political and economic uncertainty and inflation, but it has this year failed to benefit. Instead investors have made a beeline for U.S. Treasuries, seen as the ultimate safe haven, which meant they had to buy dollars.

ALSO READ: Gold prices turned down, as US dollar continues diminishing

The lira has tumbled on worries over Turkish President Tayyip Erdogan’s increasing control over the economy and deteriorating relations with the United States. An investor flight to safety lifted U.S. Treasury yields from four-weeks lows.

The dollar index .DXY touched a 13-month high before paring gains. The higher greenback makes dollar-denominated assets more expensive for holders of other currencies, which subdues demand – a relationship used by funds to generate buy and sell signals from numerical models.

Spot gold XAU= was down 1.42 percent at $1,193.71 at 3:10 p.m. ET (1910 GMT), having earlier dipped to $1,191.35, its lowest since January 2017.

U.S. gold futures GCcv1 for December delivery settled down $20.10, or 1.65 percent, at $1,198.90 per ounce.

George Gero, a managing director at RBC Wealth Management, said “Traditional haven buyers of gold now find it too expensive in dollars,” said Weekly U.S. government data on Friday showed that gold speculators hiked their bearish bet to a record in the most recent reporting week.”

Holdings of the largest gold-backed exchange-traded fund (ETF), New York’s SPDR Gold Trust (GLD), at 25.3 million ounces have dropped about 10 percent from their April peak and are at their lowest since February 2016. Meanwhile, platinum prices neared the 10-year lows below $800 an ounce seen last month, due to a glut of metal.

Platinum is heavily used in catalysts in diesel vehicles that have fallen out of favour since 2015’s Volkswagen emissions-rigging scandal.

Comments

comments

You might also like