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John Miller
Jun 17, 2021 6:08PM ET
that's paper gold. physical not so much.
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Gold Tumbles 5% as Dollar Surge Wrecks Commodities
Published Jun 17, 2021 12:01PM ET
Updated Jun 17, 2021 02:45PM ET
(adds settlement prices, context, comments)
By Barani Krishnan
Investing.com - Gold prices tumbled almost 5% to head back to the mid-$1,700 levels last seen in April as a surging dollar wrecked the prices of commodities priced in the greenback.
Front-month gold futures on New York’s Comex settled down $86.60, or 4.7%, at $1,774.80 per ounce. The session bottom was $1,768, a low not seen since April 30.
The spot price gold, reflective of real-time trades in bullion, was down $30.61, or 1.7%, at $1,781.04 by 2:25 PM ET (18:25 GMT), touching a six-week low of $1,767.34 earlier.
Traders and fund managers sometimes decide on the direction for gold by looking at the spot price — which reflects bullion for prompt delivery — instead of futures.
Commodities from gold to oil tumbled after the Dollar Index rose toward the 92 level, rallying for a third day in row, with Thursday’s run-up fired by expectations that the Federal Reserve will raise interest rates at least twice by end of 2023 to 0.6% from current levels of zero to 0.25%.
The Fed also signaled at the end of its monthly policy meeting on Wednesday that it was looking out for data on when to start tapering its monthly asset purchase of $120 billion.
The central bank has been buying at least $80 billion in Treasury bonds and $40 billion in mortgage bonds to support credit markets and the economy since the COVID-19 outbreak last year.
“The Fed’s taper tantrum trade is hitting gold the hardest right now and could last a couple more sessions,” said Ed Moya, analyst at online broker OANDA, observed.
Moya observed that gold did not do a good job of defending its $1,800 level and momentum selling had since taken it 38% below the $1,919.20 high made at the beginning of June.
“Gold looks like a falling knife but eventually the longer-term prospects will attract buyers,” he said. “Long-term bets on gold could start to emerge closer to the $1750 level, but some might wait and see if one last thrust lower eyes the $1,675 level.”
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Comments (8)
Don Burris
Jun 17, 2021 4:50PM ET
so let me get this straight. Feds create trillions upon trillions and we're drowning in debt and then the feds say they might start tapering in 2023. And that's why gold tanked. RIGGED!!
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Joel Schwartz
Jun 17, 2021 4:50PM ET
Search the term “JPM fined by DOJ for manipulating precious metals ans goverment treasury markets” online. JPM and GS are cartels.
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خالد بكري
Jun 17, 2021 4:50PM ET
gfds
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Barani Krishnan
Jun 17, 2021 4:50PM ET
Joel Schwartz Absolutely true.
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florencia feitosa
Jun 17, 2021 4:11PM ET
they will only raise rates in 2023, and gold has already dropped today to the same level as last month. this is bizarre.
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Terence Williams
Jun 17, 2021 3:00PM ET
Daily action is nothing to get excited about..but it does confuse the majority of people.
We are in epic times..and the ride may get more..sporty. Plenty of clues which lead to more coming volatility.
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AllatraYiveh
Jun 17, 2021 1:58PM ET
this is just an excuse for banks to cover their shorts and dump before basel III
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oguz erdek
Jun 17, 2021 1:54PM ET
BS , playing with people
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François Du
Jun 17, 2021 12:41PM ET
.037% raise in 2023 and everybody is rushing...buying dollars. Smoke and mirrors.
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Francesco Lucchesi
Jun 17, 2021 12:41PM ET
surreal stupidity
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Kim Andreasen
Jun 17, 2021 12:41PM ET
Financial markets and to some extent the real world has been wrecked since 2008. Centralbanks have just been postponing the inevitable. I foresee another great depression in the coming years if inflation isn't transitory and rates will go up. Most governments will fail on their insane high debt and thousands of corporates will go bankrupt. It's not a doomsday forecast, it's likely the fact a few years from now.
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Edoardo Spagarino
Jun 17, 2021 12:41PM ET
the issue Is not the 0.375 in two Years, but the stop to the 120 billions per months in debt purchased.. at least my opinion
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simone scelsa
Jun 17, 2021 12:41PM ET
Edoardo Spagarino that should strengthen gold, not the opposite.
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Kim Andreasen
Jun 17, 2021 12:41PM ET
simone scelsa higher inflation is positive for commodities including gold. QE is supporting inflation, so less QE is bad for gold. Should also be bad for stocks, but that has yet to materialize
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tonald drump
Jun 17, 2021 12:34PM ET
When did they begin purchasing assets?
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Kim Andreasen
Jun 17, 2021 12:34PM ET
They been doing it more or less since 2008
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