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Gold prices were edging lower Wednesday as the U.S. dollar strengthened above a key point, creating some headwinds for bullion.
The buck was up 0.3% against a basket of a half-dozen rivals and headed up to its loftiest level in more than a week above 100, as gauged by the popular ICE U.S. Dollar Index DXY, +0.26%.
Gains for the currency and a relatively steady climb in equity markets amid the COVID-19 pandemic has kept gold in a trading range around $1,700 an ounce.
Assets traded in dollars, like gold, often move inversely with the currency, as a stronger buck can make assets priced in the monetary unit more expensive to buyers using other currencies.
“The dollar has strengthened the last couple of days and we’ve seen decent moves in equity markets during that time, it just hasn’t really filtered through to the yellow metal,” wrote Craig Erlam, senior market analyst, at Oanda in a Wednesday note.
“Gold remains in consolidation mode. It’s barely budged the last couple of days, hovering around the $1,700 level,” he wrote.
June gold GCM20, -0.11% fell $2.70, or 0.2%, at $1,707.90 an ounce after it declined by a similar amount on Tuesday.
Meanwhile, July silver SIN20, +1.09% gained 17 cents, or 1.1%, at $15.275 an ounce, after it rose 2.1% on Tuesday.
Commodity traders, however, will watch a private-sector employment report from payment processor Automatic Data Processing Inc. ADP, +0.92% for early clues to the employment condition in the U.S. for April. Approximately, 20 million jobs are expected to have been lost on the month, which could provide a haven bounce for gold.
