Gold Down to More Than Five-Week Low as Dollar Strengthens

  • Commodities News
Gold Down to More Than Five-Week Low as Dollar Strengthens
Credit: © Reuters.

By Gina Lee – Gold was down on Monday morning in Asia, hitting a more than five-week low. Meanwhile, the dollar strengthened and investors await the latest U.S. Federal Reserve policy decision.

Gold futures were down 0.31% to $1,746.05 by 12:14 PM ET (4:14 AM GMT), after hitting $1,741.8, their lowest level since Aug. 12, earlier in the session. The dollar, which normally moves inversely to gold, edged up on Monday.

All eyes are on whether the Fed will announce that it will begin asset tapering as it hands down its policy decision on Wednesday. The central bank will also likely release fresh economic projections and a new read on officials’ expectations vis-a-vis interest rate hikes.

Investors are starting to think that an asset tapering announcement could be imminent and that there could be a hawkish surprise in the dot plots, SPI Asset Management managing partner Stephen Innes told Reuters.

“It really looks like the markets turned quite bearish on gold, with some critical support levels, including $1,780 and $1,750, giving away and I think this does open up for a test of $1,700,” he added.

Other central banks, including those in Japan , the U.K ., Switzerland , Sweden , Norway , Indonesia , the Philippines , Taiwan , Brazil , South Africa , Turkey and Hungary , will also hand down their respective policy decisions throughout the week.

In other precious metals, silver fell 1.2% to $22.13 per ounce, after earlier hitting its lowest level since November 2020 at $22.01. Platinum slipped to a ten-month low of $907.50 and was last down 2.8%, while palladium slumped 3.5%.

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