Improved risk sentiment causes gold prices to drop
Strong US data and corporate results coupled with firmer dollar responsible for biggest one day percentage loss in a month
Extending its losses further, spot gold prices was down 0.1 percent at $1285.19 per ounce at 1am GMT on Friday. US gold futures were 0.1 percent lower at $1285.10 an ounce. Thursday saw a 0.8 percent decline proving to be its biggest one day decline in a month after risk sentiment improved.
US stock indexes gains along with robust economic data has led to investors gaining confidence in equities thereby leading to a drop in the prices of the yellow metal. The dollar index rose to its highest level in nearly two weeks against a basket of currencies. The pullback in risk aversion lifted treasury yields. The rise in yields underpinned the US dollar. A stronger dollar makes gold more expensive for holders of non-US currency.
Early in the week, spot gold prices rose 1.1 per cent, registering their best one-day percentage gain in nearly three months after China announced that it would impose retaliatory tariffs on a range of US goods. Gold is the one metal that most economists are bullish on owing to its popularity amongst the general public.