Gold Price Hits Over Two-week Low As Dollar Firms Up

October 31, 2018

New York (Oct 31)  Gold prices fell on Wednesday to hit over two-week lows as global equities rebounded and the dollar rose to its highest levels in more than a year on the back of upbeat US consumer confidence data released overnight.

Spot gold eased 0.41% to trade at USD1,217.56 an ounce, after having touched its lowest level since Oct. 12 at USD1,215.35 earlier in the session. US gold futures were down 0.28% at USD1,219.20 an ounce.

The dollar rose to its highest levels in more than a year after a measure of US consumer confidence rose in October to an almost two-decade high, primarily because of strong employment growth.

The dollar's surge was also aided by dovish comments by the Bank of Japan and weak manufacturing and services data from China.

The Bank of Japan left interest rates steady, cut its inflation forecasts and signaled it was a long way off from exiting its massive stimulus program.

Elsewhere, China's official manufacturing PMI fell to 50.2 in October, the lowest since July 2016 and down from 50.8 in September, in a sign of further loss of momentum in the world's second-largest economy.

The services PMI dropped from 54.9 to 53.9, marking the weakest pace of expansion since August 2017.

On the heels of the disappointing data, the People's Bank of China weakened the yuan fix to the lowest in more than a decade.


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