Gold Nears $2,000 As Wall St Drops Into The Red

By Glenn Dyer | More Articles by Glenn Dyer

For a third session, gold stood out with another record-setting surge closer to the once impossible to believe $US2,000 an ounce level.

Other commodities were mixed and Wall Street ended in the red as renewed fears about coronavirus infections across the country, no progress on a new stimulus package and unemployment benefits extension past Friday from Congress and more signs of a sagging economy.

Wall Street’s slide saw the overnight futures trading on the ASX 200 lose 24 points meaning a weak start to trading this morning after Tuesday’s near 24 point, 0.4% dip.

Trading in gold swung through a $US70 plus range on Tuesday in volatile trading, but the price ended higher.

Comex August gold rose $US13.60, or 0.7%, to settle at $US1,944.60 an ounce, the highest finish on record for a most-active contract.

It traded as high as $US1,974.70 to top the intraday record set on Monday, but it also fell to as low as $US1,900.20 to mark a wide Tuesday trading range.

Gold is up more than $US125 in little more than a week as investors bet the Federal Reserve will reaffirm its supportive monetary policies at its two-day meeting ending on Wednesday (tonight, Sydney time).

The US dollar has been falling almost across the board for a month. The US dollar index fell to a two-year low against a basket of currencies at 93.416 on Monday before recovering to 93.975 on Tuesday.

A fall in US consumer confidence this month boosted gold, and to a lesser extent, silver.

The US Conference Board reported that its Consumer Confidence Index had fallen to 92.6 this month from a revised 98.3 in June.

The US dollar, meanwhile, steadied after a sharp decline this month, while investors waited for the outcome of the Federal Reserve’s meeting.

The Aussie dollar traded around 71.50 US cents in early dealings in Asia on Wednesday morning.

Silver futures meanwhile reached a seven-year, intraday high, at $US26.275 an ounce—the highest most-active contract price level since April 2013, before easing and ending the session lower.

The September contract fell 20 cents, or 0.8% to settle at $US24.30 an ounce.

Among other metals on Comex Tuesday, September copper rose 0.7% to $US2.9175 a pound.

Meanwhile, oil futures fell to their lowest settlement in more than a week on Tuesday, as the US dollar steadied and traders continue to fret over the outlook for energy demand.

West Texas Intermediate crude for September delivery fell 56 cents, or nearly 1.4%, to settle at $US41.04 a barrel in New York after a gain on Monday.

The front-month contract ended at its lowest since July 20.

In Europe, September Brent crude eased 19 cents, or 0.4%, to settle at $US43.22 a barrel, the lowest finish since July 17.

On Wall Street, the session ended deeply in the red ahead of the end of the two-day meeting of the US Federal Reserve.

The Dow lost 205.49 points or 0.8%, to close at 26,379.28, while the S&P 500 shed 20.97 points, or 0.7%, ending at 3,218.44, after briefly trading positive. The Nasdaq lost 134.18 points, or 1.3%, to close at 10,402.09.

That was after gains on Monday.

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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