Gold sinks below $2,000 as stronger U.S. dollar weighs on precious metals

By Joseph Adinolfi

Gold and silver prices retreated on Wednesday as a stronger U.S. dollar weighed on precious metals, while investors digested a fresh batch of eurozone inflation data.

Price action

Market drivers

A stronger U.S. dollar has weighed on gold in recent sessions as the ICE U.S. Dollar Index last week rebounded off its lowest level since early February, helping to curb a torrid rally in the yellow metal that saw it rise for six straight weeks.

Several other factors impeded gains in the price of gold as well, said Jim Wyckoff, senior analyst at Kitco.

“Gold and silver prices are sharply lower in early U.S. trading Wednesday, amid bearish outside market forces at midweek that see a higher U.S. dollar index, rising U.S. Treasury yields and a drop in crude oil prices,” Wyckoff said in emailed comments.

Data released on Wednesday showed that U.K. inflation is proving sticky, causing a broad selloff in government bonds that forced up yields and translated into a jump in U.S. Treasury rates.

The Office for National Statistics said consumer prices rose 10.1% year-over-year in March, down from 10.4% in February, though above economists’ forecasts for a 9.8% rate.

-Joseph Adinolfi

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04-19-23 0957ET

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