Gold hits one-week low on broader market sell-off

BY

Gold extended losses on Friday to touch a fresh one-week low, as a general sell-off across asset markets prompted bullion speculators to trim their positions.

Other precious metals also fell to their lowest in about one week, but physical buyers and bargain hunters were expected to prevent the metals from collapsing, analysts and traders said.

Analysts more position reductions across asset markets and precious metals might give more room on the downside before recovering.
The general sell-off which started on Thursday was triggered by fears of higher interest rates in the US.

The sharp rise in Treasury yields - yesterday’s move was the biggest one day jump in 10-year yields in over three years - marked the first time since July last year that the entire yield curve was above 5%.
“Rising US interest rates - 10 year bond yields ... also imply less support for gold market,” JP Morgan said in a research note.

The dollar rose to a two-month high versus the euro, while a rise in risk aversion supported the yen.

Inflationary pressures will continue to fuel speculation over interest rate hikes in the US that could strengthen the dollar, which is a negative for the gold price.

BY

Gold prices slid sharply yesterday to their lowest level since the end of May as the US dollar strengthened in line with US treasury yields, strength in which signals increased optimism towards the economy.
Gold is seen as an alternative investment to the US currency and
typically moves counter to it.

For the moment it seems gold and the rest of the precious metals
complex will have to weather further weakness as investors look towards assets offering better returns, such as equities and treasuries.

The market is now awaiting fresh direction from US trade data
out later today.

With the 665 usd and 660 usd support levels out of the way, the precious metal may test lower in the coming days if no fresh momentum is found, analysts said, although physical demand as prices reach lower levels is likely to support the metal.

Gold has very solid support towards the 650 usd area, physical players will be active again
towards the 640 usd area, even though the physical market

Touch

thanks Mr.By!

JKL

thanks