Gold prices fall to week-low on firm dollar; investors optimistic US economy may reopen soon after enforced lockdown

Spot gold fell 0.5 percent to $1,675.92 per ounce by 0038 GMT, having touched its lowest since 9 April earlier in the session. The metal slumped about 2 percent on Friday.

Reuters April 20, 2020 07:39:10 IST
Gold prices fall to week-low on firm dollar; investors optimistic US economy may reopen soon after enforced lockdown

Gold prices fell to a more than one-week low on Monday as the dollar firmed and as investors remained optimistic that the US economy might reopen soon from lockdowns that were enforced to contain the novel coronavirus’ spread.

Fundamentals

Spot gold fell 0.5 percent to $1,675.92 per ounce by 0038 GMT, having touched its lowest since 9 April earlier in the session. The metal slumped about 2 percent on Friday.

US gold futures slipped 0.7 percent to $1,687.20.

The dollar strengthened 0.1% against key rivals, making gold costlier for investors holding other currencies.

Caution gripped Asian share markets on expectations of a busy week of corporate earnings reports and economic data will drive home the damage done by the global virus lockdown.

Gold prices fall to weeklow on firm dollar investors optimistic US economy may reopen soon after enforced lockdown

Representational image. Reuters

Governors in US states hardest hit by COVID-19 sparred with President Donald Trump over his claims they have enough tests and should quickly reopen their economies as more protests are planned over the extension of stay-at-home orders.

US Democrats and Republicans are near agreement on approving extra money to help small businesses hurt by the pandemic and could seal a deal as early as Monday, Trump said, despite hopes for a deal on Sunday.

Britain is not considering lifting the lockdown imposed almost four weeks ago given the “deeply worrying” increases in the death toll, a senior minister said on Sunday.

Japan’s exports fell 11.7 percent in March from a year earlier, Ministry of Finance (MOF) data showed, reflecting a sharp drop in external demand due to the pandemic.

Physical gold demand in China continued to be in the doldrums last week as the coronavirus-led restrictions stalled activity, with dealers in the top consumer offering massive discounts.

Speculators increased their bullish positions on COMEX gold and cut them in silver contracts in the week to 14 April, the US Commodity Futures Trading Commission (CFTC) said on Friday.

Palladium rose 2.4 percent to $2,207.81 per ounce, while platinum fell 0.9 percent to $768.12 and silver eased 0.3 percent to $15.08.

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