The US dollar rose against most majors on Monday, extending gains for the third straight day, as investors rushed to obtain dollar funding amid renewed liquidity crunch fears following sharp drop in most stock markets due to fears over a second coronavirus outbreak.
The dollar index rose more than 0.3% to 97.39 points, after it opened at 97.09, and hit an intraday low of 97.03.
The index rose 0.3% on Friday, posting the second straight daily gain, and rebounded from the 3-month low of 95.72 points.
The greenback has gained 0.15% during the past week, posting its first weekly gain in a month, on safe-haven buying.
Most global stocks and bonds plunged on Monday, as the European stock indices slumped to 3-week lows, and the US indices lost more than 3% ahead of Wall Street opening, due to renewed fears a new coronavirus wave, after a large number of new cases emerged in the Chinese capital, Beijing, and a surge in new cases in the US.
In the first coronavirus epicenter, China, the government declared a state of emergency in a Beijing suburb, after a surge of new infections around a wholesale food market.
Similarly, the number of coronavirus cases started to rise again in the US, over the weekend, with more than 25,000 new confirmed cases on Saturday alone.
Gold prices fell on Monday, to head for the second daily loss in 3 days, as investors rushed to obtain dollar funding amid renewed liquidity crunch fears following sharp drop in most stock markets.
Gold prices fell 1.5% to $1,707.92, after opening at $1,733.28, and hitting an intraday high of $1,735.75.
The yellow metal gained 0.3% on Friday, after losing 0.6% on Thursday on profit taking from a week high of $1,744.77.
Gold has gained 2.6% during the past week, posting its first weekly gain in a month, on strong safe haven buying, following a gloomy global economic outlook.
The US dollar index rose by 0.3%, extending its gains for the third straight day, which weighed down on gold and other dollar-denominated metals.
The US dollar rally comes based on liquidity crunch fears, amid a broad sell-off move in most of the global stock and bond markets, due to fears over a second coronavirus wave.
New coronavirus infections continued to rise in the Chinese capital, Beijing, for the second straight day, and the number of coronavirus cases in the US rose to more than 25,000 new confirmed cases on Saturday alone.
Gold stocks at the SPDR ETF rose 1.17 metric tonnes on Friday, the third daily increase in a row, to reach the highest total since May 2013 at 1,136.22 metric tonnes.