Pressure from stronger dollar pushes gold below $1,800

Largest intraday drop in price of gold for a month sees it fall below $1,800 mark

Gold fell below $1,800 on Tuesday, experiencing its largest intraday drop in almost a month. 

The precious metal had reached a 10-week peak at the end of last week after jobs data from US Bureau of Labor Statistics revealed employment rose by 235,000 for August – around 500,000 fewer new jobs than many analysts forecast. 

Dollar and Treasury yields weigh on gold

A strengthened dollar undid much of these gains, however. By mid-afternoon in New York, the US currency traded up 0.3% against sterling and the yen and 0.2% against the euro.

The downward momentum was further compounded by a four and a half basis point rise in the US 10-year Treasury Note to 1.383%. Not only was this above the 200-day moving average, but it also constituted a two-month high. 

Delta variant anxiety wanes

Unexpected economic data from China also dented gold’s appeal. The metal had benefited in recent months from the uncertainty surrounding the possible impact of the Delta variant of Covid-19 on the global economy, with the two leading economies of China and the United States forced to contend with the strain. 

Far from receding as a result of the uncertainty and disruption, however, China reported year-on-year export and import growth of 25.6% and 33.1%, respectively. This constituted an increase from July’s trade figure and beat the downcast forecast of analysts. 

By mid-afternoon yesterday, spot gold traded down by 1.4% at $1,796.15, having started the week at $1,825. 

Daily change
Low: 1839.57
High: 1842.72

Further reading: China sees an unexpected growth in trade

Further reading: Bitcoin becomes legal tender in El Salvador

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