Gold Retreats on Firm Dollar

Gold prices fell as much as 1.5 percent on Tuesday, snapping a five-session winning streak, as the dollar strengthened and corporate profits rose, boosting demand for riskier assets.

Spot gold was down 0.9 percent at $1,790.54 per ounce. Gold futures in the United States for December delivery fell 0.7 percent to $1,793.40 per ounce. With many earnings on the horizon, the stronger-than-expected move in equities is taking a touch off gold this morning, said Bob Haberkorn.

Strong earnings from technology companies propelled the benchmark S&P 500 index to a new high during the session, dimming the appeal of safe-haven gold.

The dollar index rose 0.1 percent, reducing the appeal of gold to investors holding foreign currencies. According to Haberkorn, “with stocks as strong as they are,” some gold traders may be taking profits from the recent uptick. Gold prices have risen nearly 2.5 percent in the last five sessions. It was fueled by concerns about inflation and uncertainty about what steps central banks would take to battle increasing prices.

Technical Analysis

Analysts believe gold will not deviate too much from the critical technical level of $1,800 per ounce, emphasizing inflation—gold haven against increasing inflation, which usually follows widespread money issuance by central banks.

This week will dominate by important central bank meetings, including the Bank of Japan and the European Central Bank. The Federal Reserve of the United States will meet next week to discuss policy. A move below $1,780 would “look pretty awful for gold, which has been in an upward trend throughout the month. Silver fell 2.2 percent to $24.01 per ounce in other news. Palladium declined 2.7 percent to $1,995.91 per ounce, while platinum fell 2.6 percent to $1,029.65 per ounce.

The economy is recovering from the worst of the pandemic. Hence, demand for crude among refiners producing gasoline and diesel in the United States has increased. Because of the global market, other countries have turned to the United States for oil barrels, increasing pulls from Cushing.

Analysts anticipate that the draw on inventories will continue in the short term, which might push up US oil prices, which have already risen by about 25% in the last two months.