Gold prices continue to decline under the rising US dollar pressure

Mohammed Abdelkhalik
October 27, 2020

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Gold Prices Outlook: 27th October 2020

Gold prices retreated in the European market on Tuesday, extending their losses for the fourth consecutive day, approaching the lowest level in two weeks, under pressure from the rise of the US dollar against a basket of global currencies.

Gold prices fell by more than 0.2% to $ 1,897.90, from today’s opening level of $ 1,902.00, and reached the highest level at $ 1,910.39.

The precious metal “gold” ended yesterday’s trading, down 0.1%, in its third consecutive daily loss, and reached its lowest level in two weeks at $ 1,891.37 an ounce, due to the rise of the US currency.

XAUUSD chart

On Tuesday, the US dollar index increased by 0.1%, extending its gains for the second consecutive day, reflecting the continued rise of the greenback against a basket of major and minor currencies.

Gold prices decline while the USD continue rising

This rise comes as investors focus on buying the US currency as the best alternative investment, in light of mounting concerns about the global economy due to the outbreak of the second wave of the Coronavirus.

There is also the absence of any tangible positive signs about reaching a political agreement in the United States on the long-stalled fiscal stimulus package, which the world’s largest economy badly needs to overcome the damage caused by the viral pandemic.

The gold holdings of the SPDR Gold Trust, the largest global index fund backed by gold, fell yesterday, remained unchanged, to continue the total at 1,263.80 metric tons, which is the lowest level since September 18th.

Author Mohammed Abdelkhalik

Professional Trader and Analyst, economist in Financial and Forex market since 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.