Precious safe-haven yellow metal had faltered as much as 1.5 per cent on Wednesday’s commodity market wind down as the American currency appeared to have regained some of its safe-haven appeal after an ISM (Institute of Supply Management) survey data on US manufacturing activity PMI (Purchasing Managers’ Index) had reported earlier on Tuesday that the US factory activities had picked up to a roughly 22-month-high last month, eventually spurring up hopes of a rapid economic recovery from the pandemic-induced fiscal fallouts.
Other precious metal futures such as platinum and silver had also pared earlier gains and wrapped up the day down by 4.2% and 3.2% per cent respectively. In point of fact, Wednesday’s whiplash in Gold futures’ prices was almost entirely galvanized by a stronger American currency, while a weaker German retail sales data pointing towards a slowdown in eurozone economic recovery, had also fuelled up the Dollar buying bonanza on Wednesday’s market.
American Dollar digs out of correction course as Gold futures plummet
Citing statistics, on Wednesday’s commodity market round off, spot gold futures’ prices, which had surged as much as 27 per cent thus far this year, were jolted by 1.6 per cent to $1,939.66 an ounce, while the US gold futures’ prices had taken a hefty header of 1.7 per cent to curtain off the day at $1,944.70.
Besides, the American Dollar Index (DXY) measured against a basket of six major currencies on an average had reported a gain of 0.5 per cent after hitting a more than two-year low on yesterday.
Meanwhile, addressing to an increased appetite for the American currency which in effect had led to a wide-spread sell-off wave in the global commodity market, an analyst at ED&F Man Capital Markets, Edward Meir wrote in a client note, “The main factor is the stronger dollar. (Gold) is moving in a completely inverse direction to dollar today. ”