Gold Price Plunges for 3 Consecutive Days, While Equities, Dollar Bills strengthen

Gold Price Plunges for 3 Consecutive Days, While Equities, Dollar Bills strengthenā€

Gold touched its lowest price level in seven weeks on Tuesday after strong USA economic data reinforced expectations of another interest rate rise in the United States this year and pushed the dollar and US bond yields higher.

The most active gold contract for December's delivery was down by $1.20 or 0.09 percent, to close at $1,274.60 an ounce.

Meanwhile, world stocks continued to notch up gains, with Japan's Nikkei climbing to an over 2-year peak, tracking a Wall Street rally, as US auto sales grew in September and optimism over global economic growth picked up.

Rising yields increases the attractiveness of bonds compared to gold while strength in the dollar makes assets priced in the USA currency more expensive for buyers holding other currencies. It touched its lowest since mid-August at $1,267.76 on Tuesday. The dollar, as measured by the U.S. ICE Dollar Index DXY, -0.01% which gauges the currency against a half-dozen rivals, was nearly flat on the day but gained about 1% last week.

"The factors that pushed gold towards $1,360 in early September are now reversing", Julius Baer analyst Carsten Menke said. The exchange-traded SPDR Gold Shares ETF GLD, +0.05% meanwhile, traded up 0.1%.

"Asian trade on Wednesday saw a modest recovery to bullion on the back of dollar weakness", MKS PAMP trader Sam Laughlin said in a note.

"Gold might just keep drifting lower until the Chinese return".

Among other metals, silver was up 0.5pc at $16.68 an ounce after marking its lowest since Aug 9. Platinum for next January dropped 1.10 dollars, or 0.12 percent, to settle at 915.50 dollars per ounce.

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