Gold prices edged lower on Wednesday, losing ground after three successive days of gains, weighed down by a stronger dollar.
However, gold’s losses were not significantly sharp as global stocks tumbled amid a surge in new coronavirus cases across the world, and the International Monetary Fund’s bleak outlook for the global economy this year.
The dollar index advanced to 97.16, gaining about 0.54%, after staying weak in the past two sessions.
Gold futures for August ended down $6.90 or about 0.4% at $1,775.10 an ounce, well off the day’s high of $1,796.10.
On Tuesday, gold futures for August ended up $15.60 or about 0.8% at $1,782.00 an ounce, the highest close since early October 2012.
Silver futures for July settled lower by $0.393 or about 2.2% at $17.670 an ounce, while Copper futures settled at $2.6505 per pound, losing $0.0080 or 0.3%.
White House health advisor Dr. Anthony Fauci warned on Tuesday that parts of the U.S. are beginning to see a “disturbing surge” of Covid-19 cases. Fauci told Congress that the next two weeks would be critical in trying to keep the virus under control.
The International Monetary Fund today forecast a deeper recession for this year and a slower and uncertain recovery for next year after the coronavirus, or Covid-19, pandemic plunged the global economy into a crisis like no other.
The IMF predicts that the global economy will shrink 4.9% this year, significantly worse than the 3% drop it had estimated in its previous report in April. It would be the worst annual contraction since immediately after the Second World War.
For the United States, the IMF predicts that gross domestic product will fall as much as 8% this year, even more than its April estimate of a 5.9% drop. That would be the most severe recession since the Great Depression of the 1930s.