Gold at 21-month low after 7-day losing streak

Gold posted a seventh straight session of losses on Wednesday, with fresh dollar gains pushing the price of the precious metal to a 21-month low.

On Wednesday, the ICE US Dollar Index rose 0.5% to 107.03.

The most obvious reason for gold’s decline is the dollar’s sharp rise, “as the ICE US Dollar index (which compares the US dollar against a basket of the world’s six most popular currencies) renewed its 20-year highs,” notes Alex Kuptsikevich, senior market analyst at FxPro. “Gold often acts as a ‘leveraged dollar hedge’ for investors, so it was not surprising to see such a market reaction,” he added.

Kuptsikevich pointed out that pressures on the price of gold may have been exacerbated by the ongoing sell-off in industrial metals and pressures on silver as a result of the worsening global economic outlook.

“The price of gold is now at the lows it recorded at the end of last year,” he said, adding: “This position shows both buying momentum and huge downside potential.”

The August gold contract on Wednesday fell $27.40, or nearly 1.6%, to settle at $1,736.50 an ounce, the lowest level for the precious metal’s most active contract since September 2021. gold’s seventh straight session decline also marks its longest losing streak since March 5, 2019, according to Dow Jones Market Data.

Silver for July delivery moved slightly higher after five sessions of declines that took it to its lowest level since July 2020 yesterday, finally settling at $19.159 an ounce, up 4 cents, or 0.2%.

Copper for September delivery, which earlier fell to a 20-month low amid fears about the global economy, ended up slightly down 0.2% at $3.408 a pound.

In other metals, the October platinum contract lost $9.80, or nearly 1.2%, to settle at $840.90 an ounce, while palladium for September delivery fell $22.50, or 1.2%, to end the day at $1,896.30 an ounce.

In other industrial metals, aluminum added 1.1% to $2,417 a tonne after touching its lowest level since June 2021, while zinc rose 0.6% to $3,009 a tonne, recovering from its lowest price since last August.

Nickel fell 3.7% to $21,815 and tin slipped 4.4% to $24,850.