Gold Dips 2.1% as Dollar Holds Gains

Taarek Refaat

Gold prices fell by more than $42 when settling trading on Wednesday, with the US currency's gains and the Federal Reserve’s minutes awaiting.

The yellow metal was negatively affected by the US currency’s shift to rise during trading after it recorded its lowest level in more than two years yesterday, as the strength of the greenback makes gold more expensive for holders of other currencies.

The dollar, which is considered a safe haven, has lost its attractiveness recently after the Fed launched a set of financial stimulus measures and reduced the interest rate to a near zero to ease the economic damage caused by the outbreak of the corona epidemic.

Gold's losses came with US stocks' gains and their rise to record levels, led by Apple shares, whose market value exceeded the $2 trillion mark.

Today investors will focus on the Federal Reserve meeting minutes from their latest monetary policy meeting.

Upon settlement, the price of gold futures contracts for December delivery fell by 2.1%, equivalent to $42.80 to record $1970.30 an ounce.

The precious metal ended yesterday's session above the $2000 an ounce barrier.

By the end of today's trading, the spot price fell to $1965.71 an ounce, down by more than 1.8%, losing about $36 of its value.

At the same time, the main dollar index, which compares the performance of the US currency against 6 major currencies, rose by more than 0.3% at 92.574.

Gold prices also recorded a decline of EGP 20 per gram in evening trading, against the backdrop of the ounce globally to $1965.