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Gold reaches 6-month minimum on strengthening greenback
On Tuesday, gold kept diving for a second session in a raw in early morning trade, reaching a six-month minimum because the evergreen buck leapt and fears of escalating trade clashes didn’t back the safe haven precious commodity.
August delivery gold futures went down 0.8% on the Comex exchange being worth $1,258.90 a troy ounce. It was close to an intraday minimum of $1,257.70, which is its lowest value since December 18.
Meanwhile, the USD index, gauging the greenback’s value versus six main currencies, jumped by 0.32% demonstrating a reading of 94.25, rebounding from an overnight minimum of 93.84 that turned out to be the weakest value since June 14.
A stronger evergreen buck makes gold denominated in this currency less affordable for those who keep foreign currencies.
Gold generally neglected investors’ worries on Monday when the US Treasury Department was ordered to prevent businesses with at least 25% Chinese ownership from purchasing American tech companies.
Driving the tensions, Liu He, Chinese Vice Premier and simultaneously President Xi Jinping’s major economic adviser, told that China is ready to withstand American tariff threats.
In spite of the fact, gold is generally considered to be a safe haven asset in times of economic and political uncertainty, the most popular precious commodity was unable to conclude Monday’s trading session up.
On Tuesday, financial markets seemed to have regained some composure with some media pointing to statements by White House trade adviser Peter Navarro. This official tried to relieve investor worries as for American trade policy.
As for other metals, silver futures edged down by 0.8% coming up with $16.205 a troy ounce.
In addition to this, palladium futures went down by 0.8% being worth $928.30 an ounce. Platinum headed south by 0.9% showing $863.40.
As for base metals, copper dived 0.1% hitting $3.008 a pound.
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.
The US dollar’s weakness offered a boost to emerging-market currencies and oil.