This post was originally published on this site
Gold futures on Thursday were headed lower, as the U.S. dollar picked up steam, weighing on the precious commodity.
February gold
GCG22,
GC00,
was trading $9.30, or 0.5%, lower at $1,776.20 an ounce, following a gain of less than 0.1% on Wednesday. Bullion’s slight gain a day ago helped it notch its first back-to-back advance of the month, thus far.
However, a perkier dollar was weighing on the commodity complex, early Thursday. The U.S. dollar was up 0.3% at 96.147, as measured by the ICE U.S. Dollar Index
DXY,
a gauge of the buck against a half-dozen rivals.
“There is moderate price pressure on the metals coming from the key outside markets being in bearish daily postures—weaker crude oil prices and a higher U.S. dollar index,” wrote Jim Wyckoff, senior analyst at Kitco.com, in a Thursday note.
A downgrade of China property company China Evergrande by Fitch Ratings was blamed for some of the downbeat action in financial markets, with the dollar drawing haven bids and undercutting appetite for other assets that are perceived as havens.
“The downgrade may trigger cross defaults on the developer’s $19.2 billion of dollar debt,” Wyckoff wrote.
Evergrande has been at the center of concerns about the Chinese economy, the second largest in the world, and its overleveraged property market.
Beijing is one of the world’s biggest importers of commodities including gold; so anything that could deliver an economic hit to activity may also weigh on demand estimates for assets such as gold and silver.
Meanwhile, March silver
SIH22,
was trading 50 cents, or 2.2%, lower at around $21.94 an ounce, following a 0.4% decline on Wednesday.
