Despite the various negative headlines, the price of the yellow metal failed to extend its previous three-day upward rally, turning sour around the $1,760 level, amid a stronger US dollar and a riskier market sentiment. Today, during the Asian trading session, the gold price failed to extend its upward trend, becoming depressed around the $1,760 level, as the US dollar gathered upside momentum on the day.
The US Dollar Index climbed from the lower levels to an intra-day high of around 94.00, making gold cheaper for holders of other currencies. Thus, the bullish bias in the US dollar was seen as one of the key factors that put some selling pressure on the dollar-denominated commodity, gold. In addition to this, the global equity markets have been flashing green since the day started, which tends to undermine the safe-haven metal prices. The risk sentiment was backed by the renewed hopes surrounding the US stimulus package.
Meanwhile, Japan’s new PM, Fumio Kishida, warmly welcomes global leaders, which indicates progressive tie-ups, as the global giants overcome the pandemic with faster jabbing rates. Peviously released economic data also increased optimism about the recovery of the US economy, which positively impacted the market trading sentiment. On the data front, US New Factory Orders came in above the forecasts, surging by 1.2% in August, which is well above the market forecast of a 1% rise. The positive appearance of US stock futures highlights the risk-on sentiment, which tends to undermine the safe-haven metal, GOLD.
Stronger US dollar weighs on gold
Despite the risk-on market mood, the broad-based US dollar maintained its early-day upward rally and remained well bid on the day. The US Dollar Index surged from the lower levels and stood strong near 94.00. The higher US 10-year benchmark Treasury Yields added to the upward pressure on the USD prices, which rose two basis points to 1.48%, after testing a high of 1.56% in June. In the meantime, the previously released upbeat US data also played a significant role in supporting the US currency. The rise in the value of the…
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