Gold hits 6-week low with Jerome Powell's testimony in focus

Economies.com
2020-09-22 11:31AM UTC

Gold prices fell on Tuesday, to deepen losses for the second straight day, and dropped to the 6-week low that was hit yesterday, as the US dollar continued to rally against its peers, ahead of Fed Chair Jerome Powell's testimony before the US congress.

 

Gold prices fell 0.9% to $1,894.72 an ounce, after opening at $1,912.35, with a session-high of $1,920.02.

 

The yellow metal lost 2% yesterday, posting its biggest daily loss since August 19, and hit a 6-week low of $1,882.23.

 

While the dollar index rose 0.4% against a basket of major currencies today, rising for the third straight day, which weighs down on gold and other dollar-denominated metals.

 

The greenback shined as the best alternative investment due to growing concerns over that the global economy, after a surge in coronavirus infections in Europe and the US.

 

Concerns that some countries might re-impose another public lockdown led most of global stock markets to drop sharply, and renewed fears about a liquidity squeeze of the US dollar, especially as the new relief package in the US got delayed.

 

At 14:30 GMT, Federal Reserve Chair Jerome Powell is due testify before the House Financial Services Committee about the expected economic effects of the coronavirus pandemic

 

Bearing in mind that Powell unveiled a historic shift in US monetary policy at the Jackson Hole Economic Symposium that is aimed at allowing inflation to run above the Fed’s previous target to support the economic recovery from the coronavirus impact.

 

Gold stocks at the SPDR ETF rose 18.98 metric tonnes yesterday, the largest daily increase since June 19, to reach the highest level since February 2013 at 1,278.98 metric tonnes.

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