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Gold Continues Slide on Strong Dollar, Low Rates and European COVID-19 Numbers

Published 09/23/2020, 11:37 PM
Updated 09/23/2020, 11:44 PM
© Reuters.

© Reuters.

By Adam Claringbull

Investing.com – Gold continued its slide down on Thursday morning in Asia with a further strengthening dollar assisting its fall. The greenback was supported by a strong U.S. housing market, and concerns over risk in other markets. The metal has hit its lowest price in two months.

Gold futures were down 0.37% at $1,860.50 by 11:47 AM ET (3:47 AM GMT).

A general slowdown in Europe, alongside concerns expressed by U.S. state and U.S. Federal Reserve officials about the need for further stimulus measures, pushed gold prices down overnight to a two-month low. Gold fell through the $1,900 mark as risk-averse investors sought stability in the greenback instead.

Stocks across the globe also felt the pressure, with all markets down as the uncertainty over global economic recovery from the COVID-19 grows. The latest European purchasing manager indexes (PMI) gave rise to serious worries about the region’s recovery prospects, with the services index falling through the 50-mark separating growth from contraction.

COVID-19 cases continue to rise in Europe, with concerns that some E.U. countries are now seeing the beginning of the second wave coinciding with the onset of the flu season. Germany’s Ifo survey will be released later in the day, giving some insight into how the E.U.’s largest economy is faring.

"We have a very serious situation unfolding before us," said Dr Hans Kluge, the World Health Organization's regional director for Europe, on Thursday. He was speaking as he revealed Europe's number of weekly infections was higher now than at the first peak in March.

The latest U.S. non-farm payroll data is due on October 2, and investors are looking to it to see if there has been an improvement in the U.S. economy.

Latest comments

strong USD is how much???
Hoe come thr Fed's decision to keep interest rates low for the foreseeable future adds to the precious metal’s descent price? A person that writes this can not have much knowledge about gold
I'm trying to understand the same
way oversold for now. market never goes one direction  it will down and up and down up and make a trend. for now it seems there is a strong resistance and support forming 1858~1868 and might bounce to 1930~1950 range behold
yeap 1900 break is quite ugly . hope can bounce back to 1930 soon.
I think it will test 1800
unlikely its oversold already.
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