Connect with us

Hi, what are you looking for?

Commodities & Futures

Gold Down 3rd Week in Row, After Collapse to $1,600 Territory

Commodities31 minutes ago (Mar 05, 2021 03:40PM ET)

By Barani Krishnan

Investing.com – Gold continued to seek meaningful support on Friday, posting a third straight weekly loss as it struggled to recover from a collapse to $1,600 levels triggered by a spike in U.S. bond yields and the dollar.

Gold for April delivery on New York’s Comex settled up $1.10, or less than 0.1%, at $1,701.80 an ounce. For the week though, it fell 1.5%, extending last week’s decline of 2.7% and the previous week’s drop of 2.5%. In Friday’s session, it fell to as low as $1,684.05 — the lowest price since April 2020 for a benchmark gold futures.

“It is possible we will see gold reach above $1,700 again in the near future but if it does, it will likely be brief and I would consider it a selling opportunity,” said Eric Scoles, analyst at Chicago’s Blueline Futures.

“This market is on track to keep going down and I expect to see it below 1600 with potential to drop further from there. Big picture: 2020 gave us one of the most bullish possible situations for gold but that is ending. We are recovering and money is going to move into assets where it will grow and gold prices will suffer.”

Spot gold, which reflects real-time trades in bullion, was up $1.53, or 0.1%, at $1,698.86, after a bottom $1,687.45 — its lowest since June 2020. Hedge funds and other money managers sometimes rely more on the spot price than futures for determining direction in gold.

Gold’s tumble this week was driven by the same phenomenon of the past two weeks — surging bond yields and the dollar

Yields and the greenback soared anew this week after Federal Reserve Chairman Jerome Powell said the central bank was unlikely to step up bond buying to tame fears of a sudden inflation spike from an U.S. economy increasingly becoming unshackled from the Covid-19 pandemic.

While gold itself has been touted and used as a hedge against inflation for decades, that quality has been played down for months by markets. The yellow metal has fallen from grace since August, when it hit record highs of nearly $2,090. Losses in gold have accelerated since the November breakthroughs in Covid-19 vaccines.

Traders had expected gold to see another meltdown on Friday after the Labor Department reported a growth of 379,000 jobs for February in a pandemic-suppressed market.

While that number was way above the 182,000 jobs growth forecast by economists, it also came on the back of a flat trendline for unemployment, which stayed at 6.2 percentage points.

That spared gold from another licking.

Gold Down 3rd Week in Row, After Collapse to $1,600 Territory

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Uncategorized

Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora incidunt.

Uncategorized

Nemo enim ipsam voluptatem quia voluptas sit aspernatur aut odit aut fugit, sed quia consequuntur magni dolores eos qui ratione.

Uncategorized

Quis autem vel eum iure reprehenderit qui in ea voluptate velit esse quam nihil molestiae consequatur, vel illum qui dolorem eum.

Uncategorized

Neque porro quisquam est, qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit, sed quia non numquam eius modi tempora.

Disclaimer: Wisegazette.com it's managers and its employees (collectively "The Company") do not make any guarantee or warranty about what is advertised or above. Information provided by this website is for research purposes only and should not be considered as personalized financial or health advice. Copyright © 2021 Wise Gazette. All Rights Reserved