Gold recovered some ground on Friday as weakening of the dollar relieved pressure on prices, but the metal remained near 19-month lows and looked set for its biggest weekly fall since May 2017. Gold has bowled down 14 percent from its April high as the rally in the greenback has made the dollar-priced bullion more costly for the buyers with the other currencies. The investors are seeking a safer place in order to store the assets amidst the trade disputes and the Turkish currency crisis has preferred the dollar to gold.
Investors seeking a safe place to store assets amid trade disputes and a Turkish currency crisis have preferred the dollar to gold, sabotage the reputation of the bullion as a safe haven. The news of the planned US and China trade talks and steadying of Turkey’s lira has steadied the nerves. From a 13-month high on Wednesday against a basket of peers the dollar has weakened against the currencies of key gold markets – the euro zone, China and India, helping gold regain its footing, said ABN AMRO analyst Georgette Boele. “I expect the dollar to peak in the coming weeks … Gold should bottom out here,” she said.
On Thursday the Spot Gold has touched $1,159.96, the lowest since January 2017. U.S. gold futures were 0.1 % lower at $1,182.30 an ounce. “It’s reasonable to expect prices to retrace some of the recent aggressive move down in the short term, but there doesn’t seem to be evidence for a sustained move higher yet,” said Nicholas Frappell, general manager at ABC Bullion. “Everyone who wants to be short is short, and if you are still long and have held your position all the way down, why would you sell here?”
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According to the technical side, the Fibonacci resistance was at $1,185.30 with the support in the month of January 2017 low of $1,146.20, analysts at ScotiaMocatta said, adding that gold would likely fall further. In other precious metals, silver was up 0.1 % at $14.62 an ounce but down 4.2% this week, the biggest weekly loss since February. On Thursday it touched its lowest since February 2016. Platinum was 0.8% lower at $771 and set for its biggest weekly drop since November 2015, down 6.8%.
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