In the face of a steady spike in pandemic cases across the densely populated parts of the world alongside a rising uncertainty over the global economic landscape, the precious yellow metal gold futures’ prices slid on Friday and wrapped up the day near their two-month lows, as a number of market participants baffled by the uptick in pandemic cases appeared to be seeking safety into the American currency despite uncertainties over the next round of pandemic relief bill.
In point of fact, Friday’s tottering of the precious gold futures’ prices was almost entirely galvanized by a media headline that the bipartisan lawmakers in the Capitol Hill had been working out a $2.2 trillion pandemic relief bill, though several analysts had expressed sheer scepticisms over the progress adding a trillion-dollar stimulus appeared highly unlikely ahead of a November 3 US Presidential Election.
Nonetheless, coupled with an upbeat remark from top White House officials regarding a pandemic relief bill alongside a cascade of upbeat US economic data such as a steady rise in US new home sales in August alongside an uptick in US Capital goods’ orders last month, had led to a flight-to-safety response among the investors, while an inclination of a raft of stiffer pandemic restrictions in the 27-member bloc had added to further strains and had spurred up a US Dollar buying spree further.
Gold slips as American Dollar regains safe-haven appeal
Citing statistics, on Friday’s commodity market round off, the spot gold futures’ prices had ended the session down by 0.3 per cent to $1,862.95 per ounce, while the US gold futures had faltered as much as 0.6 per cent to $1,865.20 an ounce.
For the week, spot gold futures’ prices had been down by 4.4 per cent that marked up the precious metal’s worst weekly percentage decline in one month and a half. In tandem, the US Dollar Index (DXY) measured against a basket of six major currencies on an average had winded up the day 0.30 per cent higher to 94.60, while for the week the American Dollar Index rose by 1.70 per cent to surpass its highest level since the week that ended on June 19.
Meanwhile, adding that the upbeat headlines over a trillion-dollar stimulus talks in the Capitol Hill had helped the American currency regain its safe-haven bid, a senior market analyst at OANDA in New York, Edward Moya said on the day’s FX market closure, “The Republicans and Democrats are on the same page about putting some stimulus but they are not being able to decide the amount and that uncertainty is pushing investors towards the dollar. ”