Kitco News Gold Weekly Outlook: Eyes on Key Technical Levels
(Kitco News) – Gold prices continued their slide this week, testing key technical support levels as the U.S. dollar strengthened and Treasury yields rose.
Last week, August Comex gold settled at $1852.40 an ounce, down 1.3% on the week.
Key technical levels to watch in the coming week include the $1830 and $1800 support levels and the $1880 and $1900 resistance levels.
Analysts say that gold remains under pressure as the U.S. Federal Reserve continues to raise interest rates to combat inflation. Higher interest rates make non-yielding bullion less attractive to investors.
“The Federal Reserve has made it clear that they are committed to bringing inflation down, and that means raising interest rates,” said Adrian Day, president of Adrian Day Asset Management. “That’s negative for gold in the short term.”
The dollar index, which measures the value of the U.S. dollar against a basket of currencies, has been rising in recent weeks. A stronger dollar makes gold more expensive for buyers holding other currencies.
“The U.S. dollar has been strengthening against other currencies, which is also putting pressure on gold prices,” said David Meger, director of metals trading at High Ridge Futures. “A stronger dollar makes it more expensive for foreign buyers to purchase gold.”
Treasury yields have also been rising in recent weeks, making bonds more attractive to investors than gold.
“Treasury yields have been rising, which is making bonds more attractive to investors,” said Phil Streible, chief market strategist at Blue Line Futures. “That’s also putting pressure on gold prices.”
However, some analysts say that gold could find support in the coming weeks as investors seek a safe haven amid concerns about the global economy.
“Gold could find support in the coming weeks as investors seek a safe haven amid concerns about the global economy,” said Fawad Razaqzada, market analyst at ThinkMarkets. “The war in Ukraine, rising inflation, and fears of a recession could all support gold prices.”
Overall, analysts say that gold remains under pressure but could find support in the coming weeks as investors seek a safe haven.
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