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Gold Back Under $1,700 as Dollar Gets Bid on Global Fears

CommoditiesMay 06, 2020 04:23PM ET
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© Reuters.

By Barani Krishnan 

Investing.com - Gold has lost its $1,700 perch as the dollar index goes back to scaling the high 100s in competition for the safe-haven appeal that was once the domain of the yellow metal. 

Forex dealers piled into the dollar on Wednesday, driving up the index that measures the greenback against a basket of six currencies, as coronavirus fears continued to weigh on a world emerging from lockdowns imposed by the pandemic. Gold typically moves in opposite direction to the dollar.

“The U.S. dollar continues to outperform as forex markets diverge somewhat from equity and energy markets,” said Jeffrey Halley, analyst at online trading platform OANDA. “The persistent buying of haven currency (like) U.S. dollars … suggests that currency markets are not yet wholeheartedly embracing the peak virus story.”

The dollar index was up 0.4% at 100.185 by 3:40 PM ET (19:40 GMT) after hitting a one-week high at 100.263. 

U.S. gold futures for June settled down $22.10, or 1.3%, at $1,688.50 per ounce.

Spot gold, which tracks live trades in bullion, slid $17.21, or 1%, to $1,688.66.

“Gold prices have struggled to print new highs, as concerns surrounding a deflationary impulse amid the deep economic damage contrast sharply with the ballooning central bank balance sheets and fiscal deficits,” TD Securities said in a note.

Gold Back Under $1,700 as Dollar Gets Bid on Global Fears
 

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Comments (2)
Janine Hammond
Janine Hammond May 06, 2020 5:11PM ET
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This is a bullish trap..gold going up and will reach 1750 in the coming days. US is printing dollars to keep dollar backed markets in the positive, this fake positive today was only reached due to japanese markets closed today for holiday. next few hours once the asian markets open all dollar backed currencies will be going south.
Zamacusi Ngcamphalala
Zamacusi Ngcamphalala May 06, 2020 5:11PM ET
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I agree 110%
Zamacusi Ngcamphalala
Zamacusi Ngcamphalala May 06, 2020 5:11PM ET
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Those numbers were cooked !
LongJohn Silver
LongJohnSilver May 06, 2020 5:11PM ET
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you mean bear trap
Mike The Fonz
Mike The Fonz May 06, 2020 5:11PM ET
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Zamacusi Ngcamphalala always. Not ticker is fair.
Tasha Fay
Tasha Fay May 06, 2020 4:22PM ET
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gold means nothing if your cash means nothing. :p never understood why everyone says to invest In it. lol. its like an mlm. xD
Andrew Allen
Andrew Allen May 06, 2020 4:22PM ET
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gold means everything when cash means nothing
 
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