Gold futures fell on Wednesday, snapping a four-day winning streak and recording their lowest close in a week, as a stronger dollar and margin requirements prompted traders to cut down positions in the safe-haven asset.
The dollar strengthened against peers as virus worries intensified and crude oil prices plunged to fresh eighteen year lows.
Weak retail sales data and a report showing a decline in manufacturing activity resulted in a drop in risk appetite and supported the greenback.
The dollar index rose 99.98 in mid morning trades, and despite dropping to around 99.50 past mid afternoon, was still holding in positive territory, gaining more than 0.6% from previous close.
Gold futures for June ended down $28.70, or about 1.6%, at $1,740.20 an ounce, after hitting their highest level in about 7-1/2 years a session earlier.
On Tuesday, gold futures for June ended up $7.50, or about 0.4%, at $1,768.90 an ounce, the best close since October 2012.
Silver futures for May ended down $0.625 at $15.505 an ounce, while Copper futures for May settled at $2.2960 per pound, losing $0.335.
The Commerce Department’s report said retail sales plummeted by 8.7% in March after falling by a revised 0.4% in February. Economists had expected retail sales to plunge by 8% compared to the 0.5% drop originally reported for the previous month.
A report from the New York Federal Reserve showed New York manufacturing activity contracted at the fastest rate on record in the month of April.
With the much bigger than expected nosedive, the general business conditions index plunged to its lowest level in the history of the survey—by a wide margin.
Earlier in the day, the Federal Reserve released a report showing industrial production plunged by 5.4% in March after rising by a downwardly revised 0.5% in February. Economists had expected production to tumble by 4% compared to the 0.6% increase originally reported for the previous month.
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