Gold drops from 3-week highs as dollar rebounds

Published On: July 7, 2021Categories: Alternative Investments1.3 min read

Spot gold was 0.1% lower at $1,795.39 per ounce after reaching its highest levels since June 17 at $1,814.78 on Tuesday

Gold dropped on Wednesday after reaching a three-week peak in the previous session, as a rebound in the dollar weighed on the safe-haven metal ahead of the release of minutes from the U.S. Federal Reserve’s June policy meeting.

Spot gold was 0.1% lower at $1,795.39 per ounce after reaching its highest levels since June 17 at $1,814.78 on Tuesday.

U.S. gold futures rose 0.1% to $1,795.80 per ounce.

The dollar index hovered near a three-month high hit last week, making gold more expensive for holders of other currencies.

Investors now eye minutes from the Federal Reserve’s latest meeting, due at 1800 GMT that is expected to provide clues to interest rate trajectory following a hawkish tilt from the U.S. central bank last month.

Gold is highly sensitive to rising U.S. interest rates, as these raise the opportunity cost of holding non-yielding bullion.

U.S. services industry activity grew at a moderate pace in June as unfinished work continued to pile up likely due to labour and raw material shortages.

Benchmark 10-year Treasury yields fell to their lowest levels in more than four months after data suggested the U.S. economy might not be as hot as some think.

In Germany, a survey on Tuesday showed investor sentiment dropped by much more than expected in July, though remained at a very high level, while expectations for a strong economic recovery rose.

The Dow and S&P 500 dropped on Tuesday, led by financials and other groups closely tied to economic growth, while the Nasdaq hit another closing record.

Silver eased 0.2% to $26.08 per ounce, palladium dropped 0.5% to $2,780.68, and platinum declined 0.6% to $1,085.62.

About the Author: Jonathan Adams

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