19 Sept 2021
Gold Continues to Fall as Dollar Strengthens with Upcoming Fed Meeting
The Index Today
Gold showed a slight rebound last Friday after the precious metal dropped in value against the dollar for two consecutive weeks as focus grew on the U.S Federal Reserve tapering strategy. U.S gold futures were 0.3% lower at $1,751.4 whereas spot gold was down 0.1% at $1751.29 per ounce.
The unexpected rise in U.S retail sales report this week reignited tapering fears which gave a boost to the dollar and pushing gold down by almost 3% last Thursday.
According to Daniel Pavilonis, senior market strategist at RJO Futures, “This does not bode well for gold, its most likely going to come back down.” He also stated that the safe-haven demand from developments in China regarding Evergrande have been a plus point for the dollar in comparison to gold. The upcoming Fed meeting is scheduled for Tuesday and Wednesday.
The loosening of economic support measures may reduce the precious metal’s value as a safe-haven. In addition to this, the increase in interest rates would result in higher opportunity costs of buying non-yielding assets like bullion.
Silver reportedly fell 2.4% at $22.37, making it one of the worst performing metals. On the other hand, platinum rose 0.5% to $937.67 whereas palladium fell 1.4% to $2,004.46.