Metals

Gold slides to 2-month low as economic woes lift rival dollar

A man counting gold bars.
Akos Stiller | Bloomberg | Getty Images

Gold fell to its lowest in over two months on Thursday as the safe-haven dollar continued its advance on fears around the economic recovery, while fading hopes for more fiscal stimulus also weighed on the yellow metal.

Spot gold was down 0.1% at $1,862.41 per ounce. Earlier in the day, it hit its lowest since July 22 at $1,847.57. U.S. gold futures were down 0.3% to $1,862.

"One of the factors that is pushing gold and stocks downwards is the broad assumption in the financial markets that the U.S. Congress will not provide any further economic stimulus for at least the next several months," said Jeffrey Christian, managing partner of CPM Group.

"So, the confirmation that things are getting worse economically, as you saw in the unemployment figures, has pushed gold down."

Data showed the number of Americans filing new claims for unemployment benefits unexpectedly increased last week.

Gold prices have declined more than 10% since hitting a record peak in August as expectations of further stimulus waned with the U.S. Congress locked in a stalemate.

Gold is viewed as a hedge against inflation, currency debasement and economic uncertainty.

"Gold was very aggressively long positioned. As volatility moved higher, real interest rates moved up along with the dollar, and people took profits," said Bart Melek, head of commodity strategies at TD Securities.

The dollar rose to a two-month high as concerns regarding the global economic recovery increased following a second wave of coronavirus infections in Europe.

Elsewhere, silver fell 2.2% to $22.38 per ounce, having touched its lowest since July 22 earlier.

Platinum fell 0.7%, to $832.49 per ounce having hit a more than two-month low earlier.

Palladium slipped 1.5% to $2,188.22, having touched a near-one-month low earlier.