A stronger U.S. dollar helped to push gold futures lower Wednesday, with the precious metal failing to find haven-related demand despite a global equity selloff sparked by a continued rise in COVID-19 cases in Europe and the U.S., analysts said.
European equities fell and U.S. stock-index futures pointed to heavy losses for Wall Street as European countries weighed imposing a new round of lockdowns to contain the pandemic and the U.S. saw a continued surge in new cases.
The number of new U.S. cases daily rose back above 70,000 on Tuesday after hitting a record above 80,000 at the end of last week. The U.S. has reported a record 500,000 cases over the past week, the New York Times reported, while the seven-day average of confirmed new cases hit a record of 69,967 on Monday, according to a Wall Street Journal analysis of data from Johns Hopkins University.
“Havens like gold are actually offered this morning as the yellow metal trades down below $1,900,” said Brad Bechtel, currency analyst at Jefferies, in a note. “The move in gold confirms this is more of a cash raise type of market move than anything else.
The dollar, meanwhile, rose sharply, with the ICE U.S. Dollar Index DXY, +0.71%, a gauge of the currency against six major rivals, up 0.6%. A stronger dollar can be a weight on dollar-denominated commodities, making them more expensive to users of other currencies.