Gold Drops to Eight-Week Low as the U.S. Dollar Surges
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. Silver, too, saw a dip, falling 0.5% to $30.19 per ounce, alongside declines in platinum and palladium.
A pronounced downward movement was spotted 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.
If the price breaks below this support, it may open the door for further declines, potentially targeting the 2,540 region.
Picture: Gold under pressure as dollar strength persists, testing key support as seen on the VT Markets app.
Rising Dollar Dampens the Upside of Gold
The rising dollar makes gold more expensive for buyers, while higher yields dampen the appeal of gold as a non-yielding asset.
Gold held a four-day drop as a sharp rally in the dollar weighed on the metal, even as US inflation data supported the case for another Federal Reserve rate cut next month https://t.co/VX024K0AWI
While the inflation report on 13 November 2024 points to possible easing, the overall stance of the U.S. Federal Reserve on rate cuts remains cautious. 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.
Traders remain focused on the next moves from the Fed and how they might impact demand for non-yielding assets like gold and silver.
