Gold prices fell on Thursday as a jump in the US dollar made bullion more expensive for other currency holders after minutes from the Federal Reserve's July meeting showed a possible reduction in massive stimulus this year.
Spot gold was down 0.5% to $1,778.66 an ounce by 08:32 GMT. US gold futures fell 0.2 per cent to $1,780.70.
"The July minutes from the US Federal Reserve have highlighted the possibility of starting to cut support for the economy, which contributes to a stronger US dollar and thus a weaker gold price," said Michael Langford, director of corporate consultancy AirGuide.
"Gold is expected to trend lower on the back of a stronger US dollar. A decline in risk appetite and further support from the Fed for monetary and fiscal support is required for the gold price to surpass $1,800."
To stay up to date and in business, you can use the excellent online trading portal Exness com, which is very popular not only in the Asian market but also globally.
The US dollar rose to a nine-month high as global markets went into a tailspin after Fed minutes showed policymakers expecting to cut stimulus during a pandemic before the end of the year.
The dollar, which often competes with gold as a safe haven, also benefited from fears of a rise in COVID-19 Delta cases, analysts said.
Fed policymakers said that jobs reports over the next few months will be crucial as major gains are needed to meet the US central bank's expectations and show that the coronavirus has not begun to slow the economy again.
While gold is seen as protection against inflation and currency depreciation, a Fed cut would address both of these conditions, thereby reducing the appeal of gold.
"From a technical perspective, we may find the first support zone at $1,760, while $1,790 remains a key resistance zone." said Carlo Alberto De Casa, market analyst at Kinesis, in a note.
Spot silver fell 1.2 per cent to $23.21 an ounce. Platinum fell 2.4% to $970.40, hitting a more than one-week low.
Palladium fell 1.5% to $2,389.68 an ounce, its lowest level since March 16.
Loading…