Gold loses $110 per ounce in a week, suffering its worst drop in 15 months

 Gold loses $110 per ounce in a week, suffering its worst drop in 15 months

Gold loses $110 per ounce in a week, suffering its worst drop in 15 months.

Spread the love

The yellow metal suffered its worst week since March 2020 as prices plunged by more than 5% after the U.S Federal Reserve’s moved forward its timetable for rate hikes and curbing its quantitative easing programs.

Gold futures settled at $1,769 per ounce on Friday, losing about $110, or 5.9%, after it hit a seven-week low of $1,768 amid record selling pressures among global investors.

The U.S. dollar index, which often moves inversely against precious metals prices against settled at its highest levels since mid-April.

Metal traders arbitrarily reduced their gold holdings after the U.S central bank hinted at the end of its most recent meeting disclosing its hawkish bias by raising interest rates at least twice by the end of 2023 amid surging inflation at the $ 21 trillion-plus economy.

Consequently, global investors are also weighing reports that reveal the Fed will soon begin tapering its monthly asset purchase of $120 billion.

Though recent macros from the world’s most powerful central bank maintained it planned to keep up unprecedented monetary support until employment was in full recovery mode amid recent reports that postulate Fed top official, James Bullard, saying he thought the U.S Fed could raise rates as soon as next year.

Present price patterns suggest gold bugs will likely find more sturdy support going forward if it moves towards $1750.00 an ounce. Any further decline below that price will likely spur an attractive shorter-term buying opportunity.

Investors are however hoping on the sentimental rise in U.S Treasury yields to calm down in the coming days and hinting a trend reversal is expected in the yellow metal in the mid-term.

Olumide Adesina

Olumide Adesina a France-born Nigerian, a Certified Investment Trader, with more than a decade of working expertise in Investment and Trading. He is also a reputable author and writer for CoinDesk and FxEmpire.

Related post