Gold drops nearly two per cent, US dollar rises
The US dollar is up 0.6 per cent against a basket of major currencies, which is putting pressuring on investors holding gold.
“With yields being universally low, investors are continuing to find better value in stocks rather than gold or silver, which pay no interest or dividends and cost money to store,” said Fawad Razaqzada, technical analyst for Forex.com.
“As investors continue to allocate growing proportions of their trading capital in assets that pay higher yields, precious metals will likely remain out of favour for the foreseeable future.”
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Holdings in the world’s largest gold-backed exchange-traded fund, the SPDR Gold Trust, fell to a three-week low by nearly three tonnes to 689.28 tonnes on Monday.
“Physically backed gold products (have) hardly recorded inflows since summer, signalling investor reluctance to return to the market,” Swiss private banking group, Julius Baer, said.
Silver was down 1.2 per cent at $US15.21 an ounce, platinum was down 1.5 per cent at $US957.50 and palladium was down 1.0 per cent at $US640.75.