Gold prices fell to a week low, weighed down by dollar gains after the governor of the Federal ReserveChristopher Waller called for an early reduction in economic stimulus to help draw up tighter monetary policy.
Spot gold fell 0.6% to $ 1,848.05 an ounce. Gold futures in the United States closed with a 0.5% drop to $ 1,851.60.
The dollar index rose 0.5% against its rivals, making gold more expensive for holders of other currencies.
“Gold prices are falling after a hardline Fed spoke about accelerating asset purchase downsizing, which boosted the dollar,” said Edward Moya, senior market analyst at brokerage OANDA.
“Inflation and the Fed are the main catalyst for gold and now traders will need to see what happens over the next two weeks before they have strong conviction about assessing what the Fed will do with regard to interest rates,” he added .
Waller said the US central bank should increase the pace of its reduction in bond purchases to give more room for maneuver to raise interest rates from near zero.
Gold is very sensitive to rising US interest rates, as they increase the opportunity cost of holding bullion, which does not pay interest.
Stock markets plummeted after news that Austria would re-impose total lockdown to deal with a new wave of coronavirus infections and signs that Germany could do the same.
In other metals, silver fell 0.6% to $ 24.63, platinum lost 1.8% to $ 1,028.74, while palladium fell 3.4% to $ 2,060.24, sealing its first weekly decline in three weeks.
Reference-www.eleconomista.com.mx