Gold and Silver Have Worst Weeks Since March on Rising Dollar

Andrew Cummings
September 26, 2020

Having said that, the price correction in the gold market has come quite far now, and It doesn't look there is enough bearish bias in the tank to test out the key $1,850 levels this week.

The outlook for the global economic recovery is being hit by fears that rising coronavirus cases - particularly in Europe - may lead to more national lockdowns. Gold fell 4.6% this week, while silver slumped 15%.

Gold prices edged higher on Friday as the dollar retreated and hopes for more United States stimulus measures resurfaced, although the precious metal was on track to post its steepest weekly contraction since August. That's boosting the dollar as investors seek havens, while also hurting gold, because of falling inflation expectations, according to Commerzbank's Carsten Fritsch.

Investors also grew hopeful after a lawmaker on Thursday said Democrats in the House of Representatives were working on a $2.2 trillion novel coronavirus stimulus package that could be voted on as soon as next week.

Gold extended losses, capping a torrid week for precious metals, which are set for their biggest losses since the virus panicked markets in March. The bill could get passed by the House next week.

On COMEX, a division of the New York Mercantile Exchange, gold futures for December delivery traded at $ 1,861.75 an ounce, down 0.81% as of this writing.

Platinum was little changed at $849.05, but on-track for the biggest weekly percentage fall since March 20.

The Bloomberg Dollar Spot Index climbed 0.3% and registered its best week since April.

Meanwhile, gold is now trading near $1,863 per ounce, having ended Thursday at $1,867.

Some analysts however say that gold's slump may be temporary with increased uncertainty over the USA presidential election. "The recent moves open up room for gold to move higher more materially" in the next two quarters, he said.

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