Investing.com - Gold prices dropped on Thursday while the U.S. dollar also slid despite higher demand in safe-haven assets amidst the Turkish lira crisis.
Gold Futures for December delivery went down by 0.48% to $1,179.2 per troy ounce at 12:02AM ET (04:02 GMT) on the Comex division of the New York Mercantile Exchange.
The U.S. dollar index that tracks the greenback against a basket of six other currencies also pulled back to 96.36, down by 0.24% after hitting a 13-month high in the previous session.
While traders remain concerned that the Turkish lira crisis might escalate into a new global financial disaster, most analysts believe it would not develop into a full blown crisis as the country accounts for only less than 1% of the world economy.
“Turkey’s crisis raises concerns about more fragile emerging-market countries that similarly carry larger current account deficits like Brazil, South Africa, and Argentina,” Wells Fargo (NYSE:WFC) Investment Institute said in a report.
The Turkish lira recovered on Wednesday after Qatar promised to invest $15 billion in the country.
Soner Cagaptay, political scientist at the Washington Institute said in a tweet that the meeting is a “big deal that could build investor confidence in Turkey, staving off potential economic collapse.”
The Turkish lira crisis began last Friday, when the U.S. announced sanctions against its NATO ally and doubled the tariffs on Turkish steel and aluminum, sending the lira down by over 20%.