Gold prices fall due to dollar rebounding
- 05 Jan 2021
Gulf Today Report
Gold declined on Tuesday as the US dollar gains momentum ahead of the Senate runoff elections.
Spot gold dipped 0.1% to $1,939.79 per ounce while US gold futures edged 0.1% down to $1,944.10.
DailyFX strategist Margaret Yang said, "the dollar has strengthened overnight from an over two-year low, that is weighing on prices."
Bullion advanced to 2.5% on Monday following dollar declining to its lowest since April 2018, although, the dollar has recovered since then.
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The Georgia runoff elections will determine who controls the US Senate, a win by Democrats will likely boost stimulus.
"In view of still accelerating coronavirus crisis in the US, the Fed will ... perhaps hint at further monetary support and extension of the extra low interest rate environment beyond 2023," Yang added.
Gold serves as a shield against inflation and currency debasement. The 10-year Treasury Inflation Protected Securities (TIPS) break even inflation rate on Monday.
