PRECIOUS-Gold falls as dollar rises and investors book profits
(Updates prices) * Gold has risen more than $130 so far this month * Global economy may shrink by 3% in 2020 - IMF * Interactive graphic tracking the global spread: open https://tmsnrt.rs/3aIRuz7 in an external browser By Brijesh Patel April 15 (Reuters) - Gold slipped on Wednesday as the dollar strengthened and some investors locked in profits from a surge in prices this month, but mounting fears of a global recession kept bullion firm above $1,700 per ounce.
Spot gold was down 0.4% at $1,720.80 per ounce, as of 1203 GMT. In the previous session, it jumped as much as 1.9% to its highest level since Nov. 2012 at $1,746.50. U.S. gold futures dropped 1% to $1,751.50. "It's a small correction. We're seeing some profit-taking, considering the move we have seen in recent weeks. Also a stronger dollar is not helping gold prices," UBS analyst Giovanni Staunovo said. "However, we still believe there is some upside from here. So we now target the move up to $1,800 an ounce and essentially believe aggressive monetary stimulus by central banks, such as the U.S. Federal Reserve, will keep real assets like gold supported."
Gold tends to benefit from widespread stimulus measures from central banks, as it is often seen as a hedge against inflation and currency debasement. Lower interest rates also reduce the opportunity cost of holding non-yielding bullion. The Fed last week announced a broad, $2.3 trillion effort to bolster local governments and small and mid-sized businesses hit by coronavirus outbreak. Gold prices have risen nearly 9%, or more than $130, so far this month after many countries have extended lockdowns and central banks around the world have rolled out a flood of fiscal and monetary measures to limit the pandemic's financial toll. China moved again to cushion its economy, cutting a key medium-term interest rate to record lows and paving the way for a similar reduction in benchmark loan rates.
Limiting gold's appeal, the dollar index rose 0.6% against a basket of major currencies. Share markets dipped into the red after the International Monetary Fund said the global economy was expected to shrink by 3% in 2020 because of the pandemic, in the worst downturn since the Great Depression of the 1930s.
Elsewhere, palladium was down 0.5% at $2,207.59 per ounce. "We continue to expect the palladium market to be undersupplied this year and next year, despite latest industry expectations for auto sales to plummet by at least 14%," Standard Chartered Bank analysts said in a note, adding the auto-catalyst metal would be supported above $2,000 for now. Silver dipped 1.8% to $15.52, while platinum advanced 0.5% to $778.52. (Reporting by Brijesh Patel in Bengaluru; Editing by Barbara Lewis and Pravin Char)
Don’t miss a golden opportunity.
Now that you’ve gained a deeper understanding about gold, it’s time to browse our selection of gold bars, coins, or exclusive Sprott Gold wafers.
About Sprott Money
Specializing in the sale of bullion, bullion storage and precious metals registered investments, there’s a reason Sprott Money is called “The Most Trusted Name in Precious Metals”.
Since 2008, our customers have trusted us to provide guidance, education, and superior customer service as we help build their holdings in precious metals—no matter the size of the portfolio. Chairman, Eric Sprott, and President, Larisa Sprott, are proud to head up one of the most well-known and reputable precious metal firms in North America. Learn more about Sprott Money.
Learn MoreYou Might Also Like:
Looks like there are no comments yet.