Gold Plummets to Lowest in Six Weeks as Dollar Remains Unbeatable
2023.05.18 13:30
prices slumped on Thursday, with the spot price falling to its lowest level since early April, as the continues to rally on the back of sour market mood and higher .
At the time of writing, spot price is trading at $1,955 an ounce, recording a 1.32% loss on the day and charting the third daily red candle in a row and the sixth decline out of the last seven days.
The rise of US Treasury yields across the curve continues to underpin the greenback, especially against the precious metal, which does not offer returns to holders. The rate on US 10-year note climbed for a fifth straight date to 3.64%.
The dollar has staged a sound recovery over the last weeks as expectations the Federal Reserve will halt its tightening cycle have already been digested and priced in. The CME FedWatch Tool indicates a 69% probability for the Fed to keep rates unchanged in June. The market has moved from a rate cut to another on-hold decision for the July meeting, with over 62% odds.
From a technical standpoint, the XAU/USD pair holds a negative perspective according to indicators on the daily chart, which point lower in negative territory without giving signs of exhaustion yet. At the same time, the price continues to print lower lows as it moves away from record highs.
The next and critical support area is given by the 100-day simple moving average (SMA), currently around $1,927, followed by the $1,900 level. On the other hand, if the metal manages to reclaim $2,000, it could improve the short-term outlook.
