Gold sags in Asia on stronger greenback

Gold sags in Asia on stronger greenback

On Thursday, gold sank in Asia because the evergreen buck demonstrated gains, thus making the precious commodity priced in the US currency more expensive for major buyers, including India and China.

December delivery gold futures tumbled 0.27% in New York being worth $1,248.30 a troy ounce.

Overnight, the precious commodity dived abruptly amid a soar in the greenback on the back of strengthening hopes for a year-end rate lift as well as tax reform.

Hopes rose that tax reform is going to be implemented sooner rather than later backing a move higher in the greenback, putting pressure on gold prices because Republicans in the American Congress as well as the White House disclosed plans to change America’s tax code in a proposal, which cuts taxes on wealthy businesses.

Greenback-denominated assets, including gold appear to be sensitive to moves in the US currency – a soar in the US currency makes gold less affordable for holders of foreign currency, therefore affecting demand.

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