SP Futures according to Investing.com (June 25, 2020) - Gold paused in its advance toward the $1,800-an-ounce target on Wednesday as the dollar’s unexpected rally weighed on the safe-haven, despite a risk-off mood across markets reacting to new Covid-19 fears and a grim world economic outlook from the IMF.
“Gold was doing quite well out of the shift away from risk, that was until the dollar came back into favor in the run up to the open on Wall Street,” said Craig Erlam, an analyst at New York’s OANDA. “Now the yellow metal finds itself back in the red, just as it appeared to be embarking on an ambitious run at $1,800.”
U.S. gold futures for August delivery settled down $6.90, or 0.4%, at $1,775.10 per ounce on New York’s Comex. On Tuesday, the benchmark gold futures contract spiked to $1,785.85, the highest reached on Comex since April 14. Spot gold, which tracks real-time trades in bullion, slid by $1.27, or 0.1%, to $1,767.07 by 3:45 PM ET (19:45 GMT). The bullion indicator hit an intraday high of $1,770.22 on Tuesday, marking a peak since October 2012.
Gold’s retreat came after a spike in the dollar, which acts a contrarian trade to the yellow metal. The dollar index, which measures the greenback against a basket of six competing currencies, rose 0.6%, to 97.14.
Risk appetite fell across markets on Wednesday as more than half of all U.S. states reported a rise in new coronavirus cases, with some breaking daily records. New measures taken to contain the spread of the virus was also threatening to undo some of the recent progress on reopening the economy.
The IMF, meanwhile, predicted a decline of almost 5% in world growth for 2020, substantially worse than its forecast from 10 weeks ago in April.
On Wall Street, the Dow and S&P 500 both fell around 3% after states such as New York, New Jersey, and Connecticut said they would require visitors from states with high rates of infections to self-isolate for 14 days. Other states have also suggested that restrictions could be reimposed to contain the outbreak.