Gold prices headed higher Tuesday as global equities staged a modest retreat after being buoyant for weeks on the back of the reopening of economies stricken by the coronavirus pandemic.
“The spot price of gold has broken through the resistance level of $1,700 and the recovery seems likely to continue if there are further declines on stocks,” wrote Carlo Alberto De Cas, chief analyst at ActivTrades, in a Tuesday research note.
However, investors were weighing a strengthening U.S. dollar, which precious metals are priced in, against a slide in yields of government debt. A stronger dollar can undercut appetite for gold from buyers using other currencies, while falling yields can boost the appeal of gold which doesn’t offer a coupon.
The U.S. dollar was up 0.3% at 96.86, as gauged by the ICE U.S. Dollar Index
DXY,
the 10-year Treasury yield
TMUBMUSD10Y,
was down nearly 5 basis points at 0.83%.
August gold
GCQ20,
on Comex was up $11.80, or 0.7%, at $1,717.10 an ounce, after finishing Monday’s session up 1.3%. Meanwhile, July silver
SIN20,
slipped 5 cents, or 0.3%, to trade at $17.850 an ounce, following a 2.4% climb in the previous session.
Meanwhile, global equities were in retreat early Tuesday, as investors looked for a new catalyst to push stocks higher after the Nasdaq Composite Index
COMP,
established a new closing high on Monday, retracing all of its losses from the coronavirus rout in March, while the S&P 500 index
SPX,
turned positive for 2020.
Source : MTV
