Gold slumps to lowest in a year
Jul 19, 2018-
Gold extended its downtrend on Wednesday, sinking to the lowest in a year on a buoyant dollar and falling oil prices, but some analysts said bullion was close to bottoming out.Gold has shed more than 10 percent since touching a peak of $1,365.23 an ounce in mid-April, weighed down by a stronger dollar and rising US interest rates.
Spot gold was down 0.3 percent at $1,223.22 an ounce by 1408 GMT after touching its weakest since July 14 last year at $1,220.81.
“In this environment where we also see oil prices falling, and so less concern from investors about rising inflation, that’s another negative for the gold price,” said Jens Pedersen, senior analyst at Danske Bank in Copenhagen.
Gold is regarded as a hedge against inflation.
Oil benchmark Brent crude hit a three-month low on Wednesday after a rise in US crude inventories highlighted increasing global supply and concerns over weak demand. The dollar rose across the board, climbing to a six-month high against the yen, after US Federal Reserve Chairman Jerome Powell gave an upbeat outlook for the US economy.
Higher interest rates tend to boost the dollar and push up bond yields, making
greenback-denominated gold more expensive for holders of other currencies and denting its appeal.
Published: 19-07-2018 08:10