Gold erases weekly gain on dollar strength

• Gold has surrendered weekly gains with a drop below $1,800. 
• Dollar drew bids during the overnight trade on the back of upbeat US data. 
• The US stock futures are now trade in the green and cap upside in the greenback.

Gold is currently trading at $1,796 per ounce, having put in a session high of $1,800 a few minutes ago. The yellow metal fell 0.62% on Thursday to register its biggest daily loss since July 1. More importantly, with the drop below $1,800, gold has erased the weekly gain. 

Dollar strength weighs

The American dollar, gold’s biggest nemesis, picked up a bid on Thursday after the US data showed consumer spending, as represented by retail sales, rose 7.5% in June. The dollar index, which tracks the value of the greenback against majors, ended the day with 0.27% gains. 

The greenback likely received an additional boost from the losses on Wall Street. The S&P 500 index fell 0.34% on Thursday, possibly on lingering virus concerns and tensions between the US and China. 

However, the haven demand for the greenback may now weaken, as the futures tied to the S&P 500 are reporting a 0.30%. Moreover, the governor of the US State of Texas rejected the rumor that the state was considering closure due to the rising number of virus cases. 

Even so, traders would be better off observing caution, as the Sino-US tensions would escalate if Washington banks the Chinese app TikTok citing national security reasons. In that case, the S&P 500 futures will likely fall back into the red, boosting demand for the US dollar. #gold##USDollarWeakness#

Reprinted from FXStreet，the copyright all reserved by the original author.