Gold prices plunged further at the fourth trading session of the week, as global investors considered the rising value observed in the U.S dollar.
At the time of drafting this report, gold futures traded $1,826/ounce losing about 0.50% in value amid a social media-driven rally that was in play in the past few days.
The U.S dollar which normally moves inversely to the precious metal was at its highest levels in over two months on Wednesday and thus kept its bullish run, taking into account the U.S dollar index was up by 0.23% to trade at 91.315 index points.
In addition, the Benchmark 10-year U.S Treasury yield also rose to its highest point in more than three weeks.
Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics spoke on prevailing macros weighing on the precious metal in the near term;
“Gold has relinquished its January seasonality boost. With Chinese physical demand getting balloted down due to the LNY mobility restrictions, the market remains a seller on rally environment. Gold trade flat overnight as FX market did little to show the way.”
“The long positioning in silver seems to have been reduced pretty quickly after the spike on Monday, with the metal having now gone from $25 to $30 and back to $27. Gold seems to have been dragged back to the bottom of its range for the past few weeks.”
Gold traders, however, stay resolute. On this account, the U.S dollar remains prone to a significant amount of inflationary measures. As long as gold stays above $1800 that argument should continue to hold.
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