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Gold Manages to Rebound Despite Strong Dollar

September 24, 2020 at 17:49 by Vladimir Vyun

Gold managed to log gains today following three consecutive sessions of declines. The metal remained about 4% down over the week, though. Silver, platinum, and palladium managed to join the rally, while copper posted losses.

The dollar remained strong today due to risk aversion on markets, which continued to drive investors to the safety of the US currency. Usually, commodities priced in the dollar move inversely to the currency but that was not the case for gold and other precious metals today. Market analysts speculated that the recent stretch of declines attracted bargain hunters, who were buying bullion while it was cheap.

The outlook for gold remains rather pessimistic, though. With the increasing number of coronavirus cases across the world, the upcoming US presidential election, the US-China trade tensions, and other factors making investors less willing to risk, the dollar will likely continue to benefit from the safe-haven demand. As a result, metals will remain under pressure. Gold should have strong support at the psychologically important $1,800 level. If prices break that level, a significant sell-off will likely follow.

Futures for delivery of gold in December rallied $10 (0.54%) to $1,878.4 per troy ounce as of 17:48 GMT on COMEX today. Contract for silver added $0.17 (0.74%) to its value to trade at $23.28 per ounce. Spot price for platinum climbed by $8.07 (0.96%) to $850.18 per ounce, and palladium edged up $5.66 (0.25%) to $2,235.47 per ounce. At the same time, copper declined by $0.0165 (0.55%) to $2.9765 per pound.

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