Gold prices slip further as the US dollar steadies

 
Courtney Goldsmith
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Gold prices slipped after reaching the highest point in a year last week (Source: Getty)

Gold prices edged lower today after a rally throughout August and early September petered out this week.

The yellow metal slipped below $1,322 per ounce this morning, but it has since risen back to $1,327.60, just 0.03 per cent below its closing price yesterday.

Gold neared $1,350 to reach its highest level in a year last Friday, but it lost those gains this week as the US dollar strengthened

"Improved US yields and rising USD demand could encourage a deeper downside correction. The key support to the two-month rise stands at $1,300," said Ipek Ozkardeskaya, senior market analyst at London Capital Group.

The dollar fell to a two and a half year low against a basket of currencies and hit a 10-month low against the yen last week, but it has rallied this week and was steady today ahead of the US inflation report for August.

"The dollar extended its rally in Asia rising for the third day in the last four (after a significant overall decline in 2017). This week the US dollar has been boosted by renewed optimism over a US tax overhaul and waning geopolitical and hurricane concerns," said Mihir Kapadia, chief executive and founder of Sun Global Investments.

Gold prices rose throughout July, August and early September as a war of words escalated between the US and North Korea. Investors opted for the safe haven asset over riskier equities to push the value of gold to the highest price since Donald Trump's election victory in November 2016.

Earlier this month North Korea tested its most powerful nuclear weapon yet, which it said was an advanced hydrogen bomb designed for a long-range missile.

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