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| Gold prices have stayed below $2,000 for two weeks in a row. What are the most important levels to pay attention to now? |
Gold prices have stayed below $2,000 for two weeks in a row. What are the most important levels to pay attention to now?
When gold reaches $2,000, it's too soon to know if it will still be attractive. A fall back below the important $2.00 mark could worry those who have bought gold.
The price of gold for June delivery on Comex in New York dropped 1.5% to $1989.50 at 17:27 GMT. This is the lowest level since it reached its three-year high of $2,048.60 on April 13, and the metal has now lost 3%. This week, it has declined 0.7%, after a 0.5% dip last week.
Spot gold dropped 1.3%, settling at $1,978.91 on Monday. Last week saw a slight decrease of 0.2%, bringing the current weekly decline to 1.2%. The price peak for spot gold this month was $2,048.84 on April 13th.
The value of gold dropped this week due to the strengthening of the US dollar and the increase in US Treasury yields. When the dollar gets stronger, it makes commodities priced in that currency more expensive, which decreases demand for them. Additionally, higher Treasury yields decrease interest in riskier investments like gold and reduce foreign investment into the US.
Gold's price hasn't been helped by the dollar's weaker value in the last day.
Fears that the Federal Reserve will raise interest rates to 5.25%, which would be the highest since the pandemic began, have had a negative impact on gold prices. The decision is expected to come on May 3rd.
Gold prices have been fluctuating leading up to the weekend due to questions about what direction interest rates will take in the near future. OANDA analyst Craig Erlam commented that this uncertainty has led to investors being hesitant about investing in gold.
The rally in Treasury yields has stopped the increase in gold prices, but traders seem unwilling to sell the precious metal.
"It appears investors are buying dips, so it will be interesting to see if this trend continues. Additionally, the USD range between 1940 and 1960 is a major support level.
Sunil Kumar Dixit, the Chief Technical Strategist at SKCharting.com, concurred.
Spot gold is approaching a Fibonacci level of 38.2%, with potential support at $1,955 and resistance at $1,992.