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Gold keeps diving on Turkey economic downtime
On Monday, gold headed south because Turkey’s economic turmoil left financial markets puzzled.
August delivery gold futures sank by 1.21% on the Comex exchange hitting $1,204.40 a troy ounce.
The escalating conflict between Turkey and the United States resumed on Monday. Turkey’s key financial institution promised to provide liquidity and reduce reserve requirements for the country’s banks.
Turkey’s major bank told that it had a cash buffer held by financial institutions, the lira's reserve requirement ratio cut by 250 basis points. Moreover, it had reserve requirement ratios for non-core FX liabilities decreased by about 400 basis points for maturities to three years. The previous week the Turkish national currency had slipped to fresh minimums because the country’s diplomatic clash between US and Turkish leaders spooked market participants.
On Sunday, Berat Albayrak, Finance Minister who’s the country’s president son-in-law told that this country would implement an economic action plan, although he didn’t provide further details on what the steps would be taken.
The number one precious commodity was unmoved by a weaker evergreen buck. Gold normally inches down when as the US currency goes up due to the fact it’s denominated in the evergreen buck and it’s very sensitive to fluctuations in the American currency.
Estimating the greenback’s purchasing power against a pack of its main rivals the USD index edged down by 0.12% showing 96.07.
Bullion gets less affordable for those investors who hold other currencies when the evergreen buck moves up and accordingly cheaper when it slips.
As for other metals on the Comex exchange, silver futures headed south by 0.75% hitting $15.180 a troy ounce. In addition to this, platinum futures edged down by 2.62% coming up with $807.90. Besisdes this, palladium futures declined by about 0.83% trading at $894.10 an ounce. Additionally, copper futures gained 0.24% hitting $2.749 a pound.
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.