By Barani Krishnan
Investing.com - Gold has lost its $1,700 perch as the dollar index goes back to scaling the high 100s in competition for the safe-haven appeal that was once the domain of the yellow metal.
Forex dealers piled into the dollar on Wednesday, driving up the index that measures the greenback against a basket of six currencies, as coronavirus fears continued to weigh on a world emerging from lockdowns imposed by the pandemic. Gold typically moves in opposite direction to the dollar.
“The U.S. dollar continues to outperform as forex markets diverge somewhat from equity and energy markets,” said Jeffrey Halley, analyst at online trading platform OANDA. “The persistent buying of haven currency (like) U.S. dollars … suggests that currency markets are not yet wholeheartedly embracing the peak virus story.”
The dollar index was up 0.4% at 100.185 by 3:40 PM ET (19:40 GMT) after hitting a one-week high at 100.263.
U.S. gold futures for June settled down $22.10, or 1.3%, at $1,710.60 per ounce.
Spot gold, which tracks live trades in bullion, slid $17.21, or 1%, to $1,688.66.
“Gold prices have struggled to print new highs, as concerns surrounding a deflationary impulse amid the deep economic damage contrast sharply with the ballooning central bank balance sheets and fiscal deficits,” TD Securities said in a note.