Gold prices fell below the psychological level of $1,800 in weak trades on Wednesday as the dollar strengthened and US Treasuries stabilized after falling earlier in the session. Analysts say gold trades will remain weak and range-bound this week. Analysts Jeffrey Halley and Stephen Innes interpreting the developments in the markets and their predictions. Cryptocoin. com we have compiled it for its readers.
“Gold prices may close the year softer than expectations”
Spot gold was last trading at $1,795, down 0.56%. Bullion hit a one-month high on signs of rising inflation before reversing course due to a stronger dollar. Then, with the effect of the stronger dollar, it was withdrawn below $ 1,800. Jeffrey Halley, senior market analyst at OANDA, notes in a note that the recovery in gold prices is not very convincing:
Gold’s attempts to make a meaningful recovery are not credible. Traders cut long positions at the first sign of trouble during the day.
Dollar-priced bullion tends to be sensitive to movements in the safe-haven currency, and a higher dollar makes gold more expensive for overseas buyers. Of course, the opposite is also true. Benchmark 10-year US Treasury yields have stabilized after spending most of the session slightly lower so far. Higher rates increase the opportunity cost of holding interest-free gold. Asian stocks fell after a mixed Wall Street session as regional investors positioned their portfolios for the new year and continued to grapple with rising global Omicron coronavirus cases. Stephen Innes, managing partner of SPI Asset Management, comments:
As many economists lower their growth prospects in the US, gold may strengthen and we could arguably end the year softer than many expected.