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Strong dollar causes gold to fall

Spot gold fell 1.18% to $ 1,712.90

Gold prices fell on Monday due to the appreciation of the US dollar and expectations of a speedy economy. recovery Suppressed demand for precious metals.

The product has fallen In the afternoon it will be $ 1,712.90 at 1.18 %%, Gold futures fall From 1.18% to $ 1,711.80.

According to Chief Currency Analyst Giles Coghlan, there are three reasons for this decline. HYCM..

“First, it has to do with the performance of the US dollar. There is a clear correlation between gold and the dollar. When the dollar is weak, the price of gold tends to rise and vice versa. Markets appear to be confident in the outlook for the US economy as the stimulus pass and the US slowly breaks out of the blockade, leading to a recovery in the US dollar and a fall in gold prices. We expect prices to fall further if the easing continues. “

Coghlan continues as follows. This is like a poison of gold prices. This puts pressure on gold as the actual yield goes up. Third, gold ETFs have fallen for more than 25 days. Lower gold ETFs have a big impact on gold prices, and the fund has more for sale. The gold outlook appears to be a clear sale of the rally in the current environment. “

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The dollar index was stable just below its four-month high against its rivals, but gold’s safe haven status threatened as investors turned to more risky assets. Was exposed to.

The speculator is Joe Biden Infrastructure spending packageSet on Wednesday, it is rumored to be between $ 3 trillion and $ 4 trillion.

Many see precious metals as a hedge against inflation that could be stimulated by Biden, but the recent rise in US Treasury yields has made it less attractive.

“Gold should be able to see a significant rise in the second half of this year, but by the middle of the year, we believe there is little room for a significant rise in prices,” said an analyst at Commerzbank.

“Gold currently lacks the support of financial investors due to low buying interest.”

Strong dollar causes gold to fall

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