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Gold prices drop amid strong dollar

Gold prices

Spot gold dropped 0.1% to $1,799.89 per ounce, while U.S. gold futures shed 0.2% to $1,798.90 per ounce

Price of gold dropped on Monday, hovering around the $1,800 per-ounce level amid a stronger dollar as investors eyed the Federal Open Market Committee’s (FOMC) meeting this week.

The precious metal settled down by -0.21% at 47534 yesterday as a firm U.S. dollar, stronger yields and equity markets chipped away at its appeal. Investors turned to equities as concerns over increasing Covid cases involving the delta variant eased.

The market now focuses on next week’s U.S. Fed’s meeting for more clues on monetary policy after the European Central Bank (ECB) pledged to keep interest rates at record lows for some time.

Spot gold dropped 0.1% to $1,799.89 per ounce by 0110 GMT.

U.S. gold futures shed 0.2% to $1,798.90 per ounce.

The dollar index held near a 3-1/2-month peak hit last week, making gold more expensive for holders of other currencies.

While no policy change is expected from the committee’s meeting on Tuesday and Wednesday, investors will look out for clues on when the U.S. central bank might taper its easy monetary policies.

U.S. business activity grew at a moderate pace for a second month in a row in July amid supply constraints, suggesting a cooling in economic activity.

In Europe, a growing number of countries are raising their defences to counter the rise in the delta variant of coronavirus, trying to pressure more people to get vaccinated.

Meanwhile, demand for physical gold in India was down last week as buyers were put off by price volatility, forcing dealers to raise discounts to their highest in nearly a month to encourage purchases.

Speculators raised their net long positions in COMEX gold in the week ended July 20, data from the U.S. Commodity Futures Trading Commission showed.

Silver increased 0.1% to $25.18 per ounce, while palladium and platinum were flat at $2,671.77 and $1,061.55, respectively.

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