Markets > Commodities

​Gold falls sharply as U.S. dollar rallies

CHICAGO
2018-03-29 08:57

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Gold futures on the COMEX division of the New York Mercantile Exchange posted more than one percent losses on Wednesday as the U.S. dollar rallied.

The most active gold contract for June delivery fell 17.9 dollars, or 1.33 percent, to settle at 1330.00 dollars per ounce.

The U.S. dollar index, a measure of the dollar against a basket of other major currencies, rebounded by 0.52 percent to 89.80 as of 1636 GMT.

The dollar was boosted by the news that U.S. economic growth slowed less than previously estimated in the fourth quarter of 2017, as the U.S. Commerce Department revised its third GDP growth rate earlier Wednesday.

Accordingly, the gross domestic product expanded at a 2.9 percent annual rate in the final three months of 2017, up from the previously reported 2.5 percent.
Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, priced in U.S. dollar, becomes more expensive for investors using other currencies.

Meanwhile, the Dow Jones Industrial Average rose 147.02 points, or 0.62 percent to 24,004.73 as of 1646 GMT. The rise of equities also pressured gold futures.

On geopolitical front, the recent commitment expressed by Pyongyang to denuclearization on the Korean Peninsula has eased the tension and decreased the safe-haven appeal for gold, said analysts.

As for other precious metals, silver for May delivery went down 28.8 cents, or 1.74 percent, to settle at 16.253 dollars per ounce. Platinum for July fell 11.60 dollars, or 1.22 percent, to close at 940.80 dollars per ounce.
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