Gold slides below $ 1,800 an ounce after biggest weekly fall in 11 months

Gold futures remained under pressure to start the week, drifting below the $ 1,800 an ounce threshold on Monday.

Gold for June delivery GC00,
-0.15%

GCM22,
-0.15%
fell $ 9.50, or 0.5%, to $ 1,798.70 an ounce on Comex, after dipping below $ 1,800 in Friday’s session when it closed at its lowest since Feb. 4. Gold logged a 3.9% fall last week, its largest since June 18, 2021, according to Dow Jones Market Data.

July silver SIN22,
+ 0.90%
ticked up 0.4% to $ 21,095 an ounce after falling 6.2% last week, its largest such slump since late January.

Gold “has been a victim of a strong US dollar and rising bond yields, making this non-interest-bearing commodity less appealing to yield seekers. Its performance has surprised many market participants, us included, ”said Fawad Razaqzada, market analyst at City Index and Forex.com, in a note.

Gold came off its session low Monday as the US dollar came off early highs. The ICE US Dollar Index DXY,
-0.18%
edged own 0.1% after trading near a 20-year high on Friday. A stronger dollar can be a negative for commodities priced in the unit, making them more expensive to users of other currencies.

Rising bond yields have also been a drag on gold. Treasury yields early last week traded near 3 1/2-year highs before pulling back.

Gold’s weakness, however, has still been a surprise given persistently hot inflation readings, as well as the volatility seen in equity and crypto markets, which would have been expected to spur some haven-related demand for gold, Razaqzada said.

“Those seeking to protect their wealth being eroded by inflation must be equally surprised to see the metal trade around $ 1,800,” he wrote.

“While fundamentally I continue to remain positive towards gold, I just need to see a technical reversal pattern to confirm that prices have bottomed out. One such scenario would be if gold reclaims the broken trend line and goes back above $ 1850 resistance, ”he said. “But first thing is first: it will need to defend support around $ 1800.”

In other metals trade, July copper HGN22,
+ 0.19%
edged up 0.2% to $ 4,182 a pound.

July platinum PLN22,
-1.28%
fell 1.4% to $ 917.40 an ounce, while June palladium PAM22,
+ 0.54%
was off 0.7% at $ 1,904 an ounce.

.

Leave a Comment