Gold falls to 2-month low on stronger dollar

Gold prices fell on Thursday, to deepen losses for the fourth straight day, and dropped to a 2-month low, as the US dollar continued to rally against its peers on liquidity crunch fears following the current sharp sell-off in most global stock markets.

Gold prices fell 0.8% to  the lowest since July 22 at $1,848.70 an ounce, after opening at $1,863.02, with a session-high of $1,868.90.

The yellow metal lost 2% yesterday, posting third straight daily loss and the biggest loss since August 18, as investors focused on the US dollar.

The dollar index rose 0.2% against a basket of major currencies today, rising for the fifth straight day, and hit a 2-month high of 94.55 points.

The greenback shined as the best alternative investment due to growing concerns over the rising signs on a second wave of the pandemic.

Following these developments, most global stock markets saw a sharp sell-off, which renewed fears over a liquidity crunch of the US dollar, especially in the US stock market.

Gold stocks at the SPDR ETF fell 11.09 metric tonnes yesterday, in the second straight daily drop and by the biggest since March 20, to reach a total of 1,278.23 mt.