Gold & Silver Take Hit; Dollar Flourishes

Gold fell Wednesday, pulling silver down along with it, as the USD continued its rally.

Spot gold was seen down 2.1%, settling at $1,860 by 15.12 GMT and $1,856 at its low for the day - just $61 from its July 17th bottom. The Dollar Index, on the other hand, showed the greenback near session highs at 94.445 against a basket of six other currencies.  US gold futures, in turn, settled down 2.1%, at $1,868.40 per ounce. 

Matters were even worse on the silver front. The precious metal’s spot price was seen down 6.9%, at $22.691, after a two-month low at $22.745. 

Given the US fiscal deficit and concerns of economic recovery amid the COVID-19 pandemic, gold’s demise has caught quite some investors by surprise. This does, however, make sense from another point of view: we observe underwhelming recovery of the UK and European economies, as well as US housing, employment, auto sales and general consumer sentiment all registering growth, even if slow. This, coupled with yet-again-rising US-China tensions has given dollar a strong push, while leaving gold to bite the dust.

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