Gold price tumbles on firm dollar

Highlights

  • Gold prices tumbled on Tuesday.
  • Prices surpassed the mark of US$1,800 per ounce on Monday, the highest since August 2021.
  • Investors have shifted their interest in equities, dimming the appeal of gold.

Gold prices tumbled nearly 1.5% on Tuesday snapping the gains of five sessions on the back of firm US dollar. December delivery gold futures surpassed the mark of US$1,800 per troy ounce on Monday however the futures are currently trading at US$1,793.30 per ounce, down 0.01% as of 27 October 2021 at 12:33 PM AEDT.

Stronger earnings in equities dimming gold’s appeal

The stronger earnings in equities are taking off the appeal of gold. Tech-related companies drove the benchmark S&P 500 index to a record high level during the intraday trading session, taking away the investments on safe haven.

The prices of gold were additionally weighted due to a strong US dollar that makes bullion more expensive for other currency holders.

Gold prices have rallied nearly 2.5% in the past five sessions on the back of inflation concerns and uncertainty over the measures taken by central banks to combat rising prices.

The prices of gold crossed the US$1,800 mark on Monday followed by the most recent comment of U.S. Fed Chair Jerome Powell, reiterating that high inflation would likely decrease in the next year.

Falling gold prices

Falling gold prices | Source: © Auris | Megapixl.com

Investors are now focusing on the meetings of the European Central Bank and Bank of Japan, scheduled on Thursday while the follow-up US Fed meeting is planned on 2-3 November.

Bottom Line

Gold prices tumbled on Tuesday after crossing the US$1,800 mark Monday as investors shifted their interest in equities because of higher earnings.

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