WSJ: Expectations of Rising Dollar See Precious Metals Slide
LONDON—Gold prices fell in tandem with other precious metals on the London spot market Monday, on expectations that robust economic activity in the U.S. will boost the dollar.
Spot gold was down 0.7% at $1,138.05 a troy ounce in morning European trade.
Gold is falling “because of the renewed upward revision of the second-quarter GDP figure in the U.S. and the firmer U.S. dollar,” analysts at Commerzbank said in a note to clients.
The U.S. economy grew by revised 3.9% in the second quarter, a stronger-than-expected reading that market watchers expect will boost the dollar. Gold is priced in dollars and becomes more expensive to buy for those holding other currencies when the greenback appreciates.
Still, strong demand data out of China offered some encouraging news for bulls. In August, China’s gold imports from Hong Kong and Switzerland, its two primary sources, doubled compared with last year. Demand was also strong in India, Barclays writes in a report.
China and India are the world’s largest gold consumers and demand data out of these countries often affects prices of the precious metal.
Among the other precious metals, spot silver was down 1.8% at $14.828 an ounce, spot platinum was down 1.6% at $929.92 an ounce and spot palladium was down 1.6% at $652.34 an ounce.
