Key Points:
Gold dropped to an eight-week low on Thursday, down 0.4% to $2,561.20 per ounce, as the U.S. dollar climbed to a one-year high and Treasury yields reached their highest level since July.
We’re seeing a pronounced downward movement after reaching a high of 2,618.83, followed by a drop to a recent low of 2,558.92. Currently, the price hovers near the support zone at 2,560, a level that could determine the next direction for gold.
Picture: Gold edges lower as dollar strength persists, testing key support near 2560 amid ongoing selling pressure, as seen on the VT Markets app.
If the price breaks below this support, it may open the door for further declines, potentially targeting the 2,540 region.
The rising dollar makes gold more expensive for overseas buyers, while higher yields dampen gold’s appeal as a non-yielding asset.
While last night’s inflation report points to possible easing, the Fed’s overall stance on rate cuts remains cautious.
See also: Dollar Rises Ahead of Fed Speakers
Fed officials, including Dallas Fed President Logan, warned against aggressive rate cuts that could rekindle inflation.
Investors are now looking to the U.S. Producer Price Index (PPI) and weekly jobless claims along with remarks from Fed Chair Jerome Powell for further insights into the Fed’s approach to inflation and rate policy.
Silver, too, saw a dip, falling 0.5% to $30.19 per ounce, alongside declines in platinum and palladium. Traders remain focused on the Fed’s next moves and how they might impact demand for non-yielding assets like gold and silver.
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