Investing.com — The conviction that gold has found a secure home at above $1,900 is being challenged by lower monthly milestones in the yellow metal’s price. And a fourth weekly loss.
Gold futures’ most-active December contract on New York’s Comex settled at $1,916.50 per ounce, up $1.30, or 0.01%, on the day. For the week though, it lost just over $30, or 1.5%.
Spot gold, which tracks real-time physical dealings in bullion and is more closely followed than futures by some gold traders, was below $1,890 for a second day in New York’s late afternoon trade. By 15:45 ET (19:45 GMT), spot gold was at $1,888.38, down 99 cents, or 0.01% on the day.
With the spot price of bullion already in $1,800 territory, it’s not certain how much longer those long gold futures can hang to the $1,900 ropes, say analysts. Since the start of this week, the rally in the dollar had become overbearing for gold.
“Spot gold has fallen below the $1900 level, but momentum selling has slowed,” Ed Moya, analyst at online trading platform OANDA, said, noting that “gold traders are also fixating over the $1,900 level for gold futures.”
Dollar continues climb, hurting gold
The dollar was set for a 0.5% gain on the week, as strong U.S. economic readings and hawkish signals from the minutes of the Fed’s July meeting pushed up bets that U.S. rates will remain higher for longer.
While the Fed has flagged only one more hike this year, the prospect of higher-for-longer U.S. rates bodes poorly for gold markets, given that it pushes up the opportunity cost of holding non-yielding assets. This trade had battered gold through 2022, and has so far limited any major gains in the yellow metal this year.
Anticipation of more monetary policy and economic cues from the Jackson Hole Symposium next week also kept positioning skewed largely towards the dollar, and kept investors wary of metal markets.
Gold was also pressured by a spike in U.S. Treasury yields, with the 10-year rate surging to levels last seen during the 2008 financial crisis.
(Additional reporting by Ambar Warrick in Singapore)
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