NEW YORK: Gold fell below the key $1,800 level on Thursday as the dollar strengthened and the European Central Bank kept its monetary policy on hold, prompting some investors to lock in profits.
Spot gold fell 0.8% to $1,796 per ounce by 2:24 pm EDT (1824 GMT). US gold futures settled down 0.7% to $1,800.30.
"The key narrative is that central banks are on hold for some time and more stimulus is coming but it's going to be much later. That's taking a little bit of the bullish trend that gold has firmly been in recently," said Edward Moya, senior market analyst at broker OANDA.
ECB President Christine Lagarde said the central bank will use its stimulus firepower fully even as the eurozone economy shows some signs of rebounding from its pandemic-induced recession.
Also weighing on prices, the dollar edged 0.3% higher, making bullion expensive for holders of other currencies.
"Some investors are locking profits but medium to long investors are firmly maintaining their position and they're looking to buy on any significant dip," Moya added.
Spot gold price hit $1,817.71 an ounce, its highest since September 2011, last week and has risen 18% so far this year.
Bullion, widely considered a hedge against inflation and currency debasement, has gained on the back of massive stimulus measures and low interest rates, although market participants are still divided on the outlook for inflation.
The rise in US-China tensions and an uptick in coronavirus infections in some major economies is keeping gold fundamentally supported, said Kitco Metals senior analyst Jim Wyckoff.
The recent surge in Covid-19 cases in the United States has forced states such as California to shut down again, sparking fears of more business damage.
In other metals, palladium rose 0.4% to $1,988.92 an ounce, while platinum lost 1.2% at $822.42, and silver slipped 1.2% to $19.15.
Comments
Comments are closed for this article.