Metals Stocks: Gold falls as dollar rallies amid global, tech-led selloff

This post was originally published on this site

Gold futures were headed lower early Tuesday as global stocks sank and as investors turned to U.S. dollars amid concerns about lofty valuations for highflying, technology-related stocks, which had led the rally in equities amid the COVID-19 pandemic.

“Gold is coming under a little pressure as the dollar wrestles the break its downtrend and moves into correction mode,” wrote Craig Erlam, senior market analyst at Oanda, in a Tuesday research note.

December gold GCZ20, -0.78% GC00, -0.78% was down $11.30, or 0.6%, at $1,923 an ounce, after finishing on Friday with a 2.1% weekly decline, according to FactSet data.

December silver SIZ20, -0.34% SI00, -0.34%, meanwhile, was off 9 cents, or 0.3%, at $26.625 an ounce, following a 3.3% drop from last Friday’s most-active contract settlements.

The commodity futures market didn’t post a settlement price on Monday due to the Labor Day holiday being observed in the U.S.

Remarks by President Donald Trump on Monday, threatening to “decouple” the U.S. economy from China also added to market jitters.

“We will make America into the manufacturing superpower of the world and we’ll end reliance on China once and for all, whether it’s decoupling or putting in massive tariffs like I’ve been doing already. We’re going to end our reliance on China, because we can’t rely on China,” Trump said.

U.S. stocks were likely to decline sharply, particularly the tech-heavy Nasdaq Composite Index COMP, -1.26%, while stocks in Europe SXXP, -1.75% were under heavy selling pressure early Tuesday.

The downturn for highflying stocks and a geopolitical concerns may also have been contributing to a rush to dollars, which was weighing on bullion.

Producing the stiffest headwinds for gold, arguably, was a 0.7% gain in the U.S. dollar index to 93.385, as measured by the ICE U.S. Dollar Index DXY, +0.58%, a measure of the buck against a half-dozen currencies.

A rising dollar can make commodities priced in the currency more expensive for overseas investors.

Add Comment