* US markets closed for Labor Day holiday on Monday
* India’s coronavirus infection overtakes Brazil
* Markets await ECB policy decision on Thursday
7 September (Reuters) – Gold plummeted on Monday due to a rise in the dollar, although economic uncertainties kept it from falling further as investors waited for developments in central banks.
Spot gold fell 0.2% to $ 1,928.05 an ounce at 0951 GMT. US markets are closed for the Labor Day holiday, while US gold futures were slightly changed at $ 1,934.90.
“A high dollar is weighing on gold, while long-term uncertainty still remains in the market,” said Julius Bayer analyst Karst Menke.
Menke said that gold is likely to trade sideways “fearing recession has already come in price and investors now have to wait to see what happens next to central bank policies”.
The dollar index climbed 0.2%, making gold more expensive for those holding other currencies.
Global central banks have cut interest rates to deal with the coronovirus crisis, with gold falling 27% this year as a lower interest rate reduces the opportunity cost of holding non-yielding bullion.
Investors now focused on the policy decision of the European Central Bank on Thursday.
Comedzbank said, “We wouldn’t be surprised to see gold bouncing off the low end of this corridor and rising higher in the next week, but a decline below $ 1,900 cannot be ruled out, as strong economic data is expected . ” Analyst Eugene Weinberg said.
Meanwhile, coronavirus cases in India, the world’s second largest bullion consumer, rose above Brazil in second place behind the United States.
Weinberg said, “India’s gold imports last month were good and the price movement had not been so recent that it was supported by physical demand for bars and coins.”
Elsewhere, silver was steady at $ 26.86 an ounce, platinum rose 0.5% to $ 899.32 and palladium gained 0.1% to $ 2,299.77.
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