Gold prices fell in volatile trading on Monday as a strong dollar hurt demand for the dollar-priced precious metal and put it on course for a more than three-month dip in the previous session.
Matt Simpson: It is natural that the price of gold provides some support
However, a decrease in the benchmark US 10-year Treasury rates has resulted in limited losses below zero yields, causing prices to rise to around 1,800 The dollar is helping to stay above the key psychological support level. Spot gold fell 0.45% to $1,803 at the time of writing. U.S. gold futures were down 0.53% at $1,798.7. Matt Simpson, senior market analyst at City Index, comments:
With gold, $1,800 being such a big round figure, some (traders) are trying to be bold and buy the bottom. It’s only natural that it provides some support while others close profitable shorts.
“Momentum supports more downside”
Worries about global growth allow the dollar to start the week at a 20-year high against its peers. helped and made competing safe-haven gold less attractive to buyers of other currencies. Marking the fourth weekly decline, gold prices fell more than 1% to $1,798.86 last Friday and then closed at $1,811.15. Matt Simpson comments:
But it’s not looking so good for gold bugs right now. Even if we see a bounce at $1,800, the momentum is clearly supporting more downsides.
Kriptokoin.com Cleveland Fed chairman Loretta Mester said on Friday that inflation should move lower for “a few months” before Federal Reserve officials can safely conclude that it has peaked. He added that he would be ready to consider faster rate hikes at the Fed meeting in September as soon as the data show improvement.
Although viewed as an inflation hedge, gold is susceptible to rising US short-term interest rates and bond yields, increasing the opportunity cost of holding bullion.
