Gold Weakens to Over Two-Month Low as Dollar Strengthens

Gold prices fell to an over two-month low as the US dollar strengthened amid the risk-off sentiment in global markets over worries about

Arslan Butt•Thursday, September 24, 2020•1 min read

On Thursday, gold prices fell to an over two-month low as the US dollar strengthened amid the risk-off sentiment in global markets over worries about delay in economic recovery after the coronavirus pandemic. At the time of writing, GOLD is trading at a little above $1,855.

The US dollar has been making gains over the past few sessions as markets worried about economic recovery in Europe getting derailed due to fresh lockdown restrictions driven by a resurgence in the number of cases. Meanwhile, economic data releases and recent comments by Fed officials highlights fears of economic recovery in the US also slowing down.

While this sentiment is supporting the safe haven appeal of gold, gains remain under pressure as the dollar also remains in favor as a safe haven currency. Gold shares a negative correlation with the US dollar as a stronger dollar makes the yellow metal more expensive for holders of other currencies.

Gold also remains supported over Fed officials maintaining a dovish stance on the monetary policy. Recent statements by Fed officials stress on the need for more stimulus and reiterate the central bank’s plans to keep monetary policy loose for several years in order to bring down the unemployment rate in the US.

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ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.