Gold Closes Its 4th Week In Loss, Trades Below $1890
Many traders were of the view that Gold prices had stabilized above the $1900 level. However, that belief is now challenged as the Gold contract closes its 4th consecutive week in a loss.
The Gold futures contract on the NY's Comex was seen near $1916.50 with only a 0.01% gain for the day. But if we look at the Gold's price over the week, it is down by $30, which equals 1.5%.
And if we look at the Spot Gold, it was seen below the $1890 level during the NY trading session. By the end of the day, the Spot gold trading price was $1888.38 with a loss of 0.01% (99 cents).
Gold Futures Contract Biased Downwards
Considering the recent trend in the spot Gold prices, there's a growing rumor that the gold futures will also soon move toward the $1800 trading range. In addition, the greenback rally this week is also putting pressure on the gold.
According to an analyst from OANDA, the spot gold prices are indeed bearish, below the resistance level of $1900. However, the momentum of gold sellers has also slowed down, which signifies that we have to wait a few days to see some action.
If we look at the greenback, it is showing strength against most other currencies as well as the yellow metal. This came after the Fed's meeting minutes for July showed hawkish sentiment from the officials. As a result of this, there's now a greater chance of consistently higher interest rates in the USA.
The Fed is expected to introduce one more rate hike for the rest of 2023. However, the fact that the rates will remain high for a long period of time is hurting non-yielding assets such as Gold. If we look back, one of the biggest reasons behind Gold losses in 2022 was high-interest rates, and it appears we are all set for a replay.
Looking ahead, there's a good chance that the prices of the gold futures will also come down and get near to the gold spot prices.