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Gold Retreats On Dollar Strength

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Gold Retreats On Dollar Strength

Gold edged lower on Monday as the dollar strengthened against a basket of currencies and U.S. Treasury bond yields sat around one-year highs on the back of improving economic outlook.

Spot gold dipped 0.4 percent to $1,726.48 per ounce, while U.S. gold futures were down 0.3 percent at 1,726.40.

Benchmark 10-year Treasury note yields held near 1.658 percent in overnight trading, while the dollar index hovered near early November highs amid optimism that the vaccine rollout in the United States is proceeding much more quickly than in Europe.

Gains in equities on economic optimism also weighed on the precious metal.

Investors await cues from U.S. President Biden’s infrastructure spending plan expected to be unveiled on Wednesday and the payrolls report due on Friday for further direction.

The economic package worth about $3 billion covers infrastructure, education, healthcare and environmental programs.

The administration plans to split the package into two parts to avail support from congressional Republicans.

On the Covid front, Europe seems to be starting a third wave despite the vaccine rollout.

The number of Covid-19 patients in France’s intensive care units has risen to a new high for this year, health ministry data showed on Sunday.

French President Emmanuel Macron defended his decision to not impose a third full lockdown and to keep schools open, but acknowledged that further restrictions would probably be needed.

Germany has tightened its border controls, while urging its citizens not to make unnecessary trips to France, Denmark, Austria, and the Czech Republic.

German Chancellor Angela Merkel threatened to invoke federal emergency powers to stop the spread of the disease driven mainly by the British coronavirus variant.

Elsewhere in Poland, the number of new cases hit an all-time record at the weekend.

The material has been provided by InstaForex Company – www.instaforex.com