Gold price flushes below $1,900
Gold hit its lowest level in almost 2 months
Gold prices on Wednesday fell below $1,900 an ounce for the first time in nearly two months amid continued strength in the U.S. dollar.
The precious metal traded down $39.50 at $1,868.10 per ounce. It was still up 25% this year after hitting a record high of $2,063 an ounce Aug. 6.
Ticker | Security | Last | Change | Change % |
---|---|---|---|---|
GLD | SPDR GOLD SHARES TRUST - USD ACC | 245.59 | +2.10 | +0.86% |
“Gold may be down, but don’t count it out as difficult week continues,” wrote George Gero, managing director at RBC Global Wealth Management, pointing to upcoming headlines from the Federal Reserve, the potential for further U.S. dollar strength and myriad other headwinds.
Chicago Fed President Charles Evans said Tuesday the central bank could hike rates before inflation reaches its 2% target. Last month, the Fed tweaked its policy, indicating it would let inflation run above the target for “some time” so long that it averages 2%.
Evans’ comments came as Fed Chairman Jerome Powell testified before the House Financial Services Committee, indicating that while the economic outlook was improving, the central bank would provide support for as long as needed. Powell wraps up his Capitol Hill testimony on Wednesday.
The Fed took a wait-and-see approach since earlier this year, unleashing an unprecedented amount of stimulus that pushed the U.S. dollar index to its lowest level since May 2018.
The wind of caution from the Fed has provided a near-term boost to the dollar index, which on Wednesday hit an almost two-month high of 94.31.
A stronger dollar remains a possibility over the near-term as action looks poised to test overhead resistance near the 96.00 level.
Next week, investors will have a slew of headlines to grapple relating to the election, stimulus talks, global-economic worries, and increased US-China tensions, Gero wrote.