King Dollar Throttles Gold, Breaking $1,650 Support By Investing.com
Commodities 52 minutes ago (Sep 23, 2022 12:36PM ET)
By Barani Krishnan
Investing.com — There’s no escaping the wrath of the dollar, as gold traders are finding out.
One of the yellow metal’s most sacred support lines that held through its worst selling storms of the past two years — $1,650 an ounce — broke Friday as the Dollar Index continued with its onslaught of one 20-year high after another.
Bond yields, tracking the 10-Year U.S. Treasury note, scaled 12- 1/2 year highs after the latest session peak above 3.8%. The yields reflect so-called real interest rates, or where the market thinks key lending rates set by the Federal Reserve would go.
The Fed on Wednesday raised rates by 75 basis points for a third straight month in a row, bringing key lending rates to a peak of 3.0% — or 0.8% below the bond yield level. To be sure, Fed Chairman Jerome Powell indicated there would be no let up for now in the central bank’s hiking cycle as it battles to bring inflation raging at above 8% a year to its long-standing target of 2% per annum.
Gold’s break below $1,680 “was a big deal but it hasn’t really been the catalyst for anything since,” said Craig Erlam, analyst at online trading platform OANDA.
That makes a break of the $1,650 support “a secondary confirmation of the initial breakout” and a “very bearish signal”, he added.
Gold’s benchmark futures contract on New York’s Comex, December, was down $26.10, or 1.6%, at $1,655 per ounce by 12:25 ET (16:25 GMT). The session low was $1,648.60.
The spot price of bullion, which is more closely followed than futures by some traders, was down $24.07, or 1.4%, to $1,647.26. Spot gold’s bottom for the day was $1,641.37.
“If spot gold cracks $1,640, it could go towards $1,620 and even $1,600,” warned Sunil Kumar Dixit, chief technical strategist at SKCharting.com
“However, if the Dollar Index starts to decline from 113 and heads towards 104, the $1,620-$1,600 zone in gold can attract value buyers. But $1,560, which sits at a 50% Fibonacci retracement of gold’s previous rally, is a more convincing rallying point that could bring bulls back to recent highs.”
King Dollar Throttles Gold, Breaking $1,650 Support
By Don Burgess and Eric Martyn HAMILTON, Bermuda/HALIFAX, Nova Scotia (Reuters) – Hurricane Fiona drenched Bermuda with heavy rain and buffeted the Atlantic island with…
By Scott DiSavino NEW YORK (Reuters) -Oil prices plunged over 5% to an eight-month low on Friday as the U.S. dollar hit its strongest level in more than two decades and on fears…
By Barani Krishnan
Investing.com – It’s back, the buzzword most hated by oil longs.
Recession, or the ‘R’-word as it has come to be known, was omnipotent across commodity markets…
(C) 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.