Gold price at near 3-month low in fourth weekly loss as dollar rally dampens demand
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
Spot gold was up 0.1 percent at USD 1,823.40 per ounce, as of 0804 GMT, in choppy trade. Earlier in the session, it hit its lowest since February 7. US gold futures were flat at USD 1,824.60.
Gold prices hovered near a three-month low on Friday and were set for their fourth straight weekly fall, as the strongest dollar in two decades dampened demand for greenback-priced bullion.
Spot gold was up 0.1 percent at USD 1,823.40 per ounce, as of 0804 GMT, in choppy trade. Earlier in the session, it hit its lowest since February 7. US gold futures were flat at USD 1,824.60.
“The fall through support by gold at USD 1,835.00, and the sell-off in other precious metals overnight, leave gold vulnerable to deeper losses and a potential test of support at USD 1,780.00 an ounce,” OANDA senior analyst Jeffrey Halley said.
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The dollar steadied near a fresh 20-year high scaled on Thursday as concerns persisted that the US Federal Reserve’s actions to tame inflationary pressures would crimp global economic growth, boosting the currency’s safe-haven appeal.
Bullion has lost about 3 percent so far this week, its most in two months.
Last week, the US central bank increased its benchmark overnight interest rate by an aggressive half-a-percentage point.
Bullion is sensitive to rising US short-term interest rates and bond yields, which raise the opportunity cost of holding it.
“Nominal yields will also climb, creating double yield trouble for gold investors as the Fed will remain hawkish until inflation indicators fall,” said Stephen Innes, managing partner at SPI Asset Management.
Also Read | Global growth worries send dollar to new 20-yr high
Gold’s recent slide has wiped out most gains made in a rally driven by safe-haven demand in anticipation of and after Russia’s invasion of Ukraine in February. The conflict powered gold prices all the way to near-record levels in mid-March.
Spot silver was up 1 percent at USD 20.86 per ounce, but has fallen about 6.6 percent this week, the most since late January.
Platinum gained 1.7 percent to USD 959.45 and palladium rose 2.8 percent to USD 1,961.03 though both were on track for weekly losses.
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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow
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