Reuters
Published Sep 02, 2020 20:26
Updated Sep 02, 2020 21:54
* Equities rise, dollar recovers from multi-year low
* Fundamentals for gold still positive, say analysts
* India gold imports rise in August
* Interactive graphic tracking global spread of coronavirus: open https://tmsnrt.rs/3aIRuz7 in an external browser (Updates prices)
By Diptendu Lahiri
Sept 2 (Reuters) - Gold backtracked on Wednesday from a near two-week high in the prior session as the dollar rebounded and strong U.S. manufacturing data raised hopes of a swifter global economic recovery.
Spot gold XAU= fell 0.7% to $1,957.15 per ounce by 1133 GMT, after hitting its highest since Aug. 19 at $1,991.91 on Tuesday.
U.S. gold futures GCcv1 dropped 0.6% to $1,966.70.
Gold is being weighed down by the rise in equity markets and the dollar, but "it's not very surprising that investors will take a little bit of profit" after Tuesday's rally in gold, said Commerzbank (DE:CBKG) analyst Eugen Weinberg.
"However, besides other strong fundamentals like weak economy and lower interest rates, Australian and U.S. mints reporting very high demand for gold coins will take gold above $2,000 in the long run."
The dollar index <.dxy> rebounded from a two-year low after data revealed that manufacturing activity in the U.S. increased more than expected in August, which followed similar positive indicators this week from China and Europe.
A stronger greenback makes gold expensive for holders of other currencies. USD/
The robust data also boosted equity markets. MKTS/GLOB
Nonetheless, expectations that U.S. interest rates would stay low for longer under the new monetary policy approach from the U.S. Federal Reserve put a floor under gold prices. interest rates reduce the opportunity cost of holding non-yielding bullion, also viewed as a hedge against inflation and currency debasement.
On the physical side, although overall consumption remained weak, especially in top buyer China, gold sales from Australia's Perth Mint rose threefold year-on-year in August, while India saw imports jump, pointing to a gradual recovery. [nL4N2FZ1WK
Meanwhile, Turkey's gold imports surged four-fold as Turks scrambled to hedge against record drops in the lira currency. silver XAG= dipped 2.1% to $27.58 per ounce, platinum XPT= slipped 1.2%, to $929.94, and palladium XPD= fell 1% to $2,248.72.
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Written By: Reuters
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