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Gold Prices Test Crucial $1,200 Mark as US Dollar Surges

September 4, 2018 at 13:29 by Andrew Moran

Gold futures are testing the crucial $1,200 threshold to kick off the holiday-shortened trading week. The yellow metal has already dipped below the psychological mark, but it has since pared those losses. Gold will try to hold steady, despite a rallying greenback and a string of economic reports.

December gold futures tumbled $5.70, or 0.47%, to $1,200.89 per ounce at 13:04 GMT on Tuesday. Last week, gold prices recorded a weekly loss of about 1%, adding to their year-to-date declines of 10%. In August, gold shed 2.2%.

Silver, the sister commodity to gold, is also sliding and is nearing $14. December silver futures fell $0.34, or 2.38%, to $14.21 an ounce. The white metal, which suffered a weekly drop of just under 5%, endured a 7.1% decrease in August.

The yellow metal’s descent is being driven by the US dollar on Tuesday as the greenback spiked 0.4% to 95.56. With emerging markets and their respective currencies taking a nosedive, investors are pouring into the US dollar as a safe-haven asset. A strengthening buck is generally bad for dollar-pegged commodities because it makes it more expensive for foreign investors to purchase. The greenback registered modest gains of 0.7% last week.

Investors will pay attention to Supreme Court nominee Brett Kavanaugh’s upcoming 17-hour testimony before the Senate Judiciary Committee. Although it may not have much of an impact on financial markets, experts still contend that it will add to the growing political turmoil in Washington since it is expected Democrats will automatically oppose his nomination.

Gold has been unable to benefit from exacerbated trade fears after the US government threatened to slap $200 billion tariffs on China.

For the remainder of the week, traders will comb through a plethora of economic reports, including the August employment report, weekly jobless claims, motor vehicle sales, manufacturing data, and the July trade deficit.

In other metal markets, December copper futures cratered $0.075, or 2.8%, to $2.5965 per pound. December platinum futures plunged $16.10, or 2.05%, to $771.00 an ounce. December palladium futures crashed $21.70, or 2.24%, to $948.20 per ounce.

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