Gold Hits 2-Month Low as Dollar Soars

Metals

Precious metals prices extended losses as the dollar continued to march higher on global growth concerns. These concerns have pushed the dollar value, while investors are waiting for any hints from the Federal Reserve on any possible action on monetary policy, which could boost the rush for gold again. The price of a gold ounce declined to a two-month low of $1848, and the value of a silver ounce fell sharply to $21.66, while palladium futures held steady above $2200.

Dollar

The dollar index, which measures the greenback against a basket of major currencies, hovered around 94.30 as the buck continued to benefit from the economic downturn in Europe. The recent surge in Covid19 cases in European countries triggered concerns over the economic activity, especially as governments are pushing for strict measures to avoid a significant outbreak. Market participants are looking forward to the final day of Powell's testimony and US jobless claims. The EURUSD dipped to $1.1644, and the GBPUSD retested $1.2690.

Equities

Major US stock index futures plunged amid growing woes over the economic activity. The COVID19 resurgence is weighing on the prospects of a healthy and rapid recovery. On the other hand, during his testimony, Powell hinted that the Federal Reserve used all the considered tools. However, if we come to think about it, the Fed still has room to do more, but he is pushing for fiscal stimulus. The Dow Jones Industrial Average futures dropped to 26516, the S&P500 futures fell to 3209, and Nasdaq futures declined to 10714.

Oil

Oil prices remained under pressure as concerns over the economic recovery mounted. Already, top oil producers lowered their expectations for oil demand for 2020 and 2021. The US Energy Information Administration supported prices slightly as it showed that inventories fell by 1.639 million barrels. The West Texas Intermediate crude November delivery eased to $39.11, and Brent Blend November delivery fell to $41.25.

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