Gold falls as dollar jumps to six-week high

Gold fell on Tuesday as the dollar climbed to its highest in over a month, while investors remained doubtful over additional stimulus measures to aid the coronavirus-hit economy ahead of speeches from Federal Reserve officials this week.

Spot gold had fallen 0.45% to $1,904.00 per ounce, after dipping to $1,882.70 on Monday, its lowest level since Aug. 12. U.S. gold futures fell 0.1% to $1,909.10 per ounce.

The dollar , also considered as a safe-haven, notched a new six-week high against a basket of other major currencies as markets turned risk-averse over a surge of virus cases and new lockdown measures in Europe.

“Gold could be well below yesterday’s lows depending on how deep the equity sell-off goes. It’s just a function of how panicked investors are,” Bank of China International analyst Xiao Fu said, adding the increased risk-aversion could support the dollar and weigh on gold.
U.S. President Donald Trump’s bid to quickly fill the U.S.

Supreme Court vacancy left by the death of Justice Ruth Bader Ginsburg left investors fretting over the chances of more fiscal stimulus before the election Focus now shifts to Federal Reserve Chair Jerome Powell’s testimony before lawmakers, addressing questions about the raft of emergency measures the central bank has taken to cushion the blow to the economy from the pandemic.

“Governments are unlikely to roll out more stimulus measures even if COVID-19 cases soar as they have already used much of the ammunition earlier this year,” Bank of China International’s Fu said.

On the technical side, spot gold may retest support at $1,886 per ounce, a break below which could cause a fall to $1,855, said Reuters technical analyst Wang Tao.

Elsewhere, silver slipped 2.2% to $24.18 per ounce, platinum was up 0.9% at $889.01 and palladium fell 0.3% to $2,267.54.