Will gold’s selloff accelerate next week? Search for a bottom in gold price

Will gold’s selloff accelerate next week? Search for a bottom in gold price by Anna Golubova for KitCo News

Gold was hit by a slate of negative news this week, and the disappointing price action reflected that, with the precious metal down $45 from last week’s close. But the question on everyone’s mind is just how much further can gold fall before entering a new bullish phase?

The mid-$1,700s level is a great buying opportunity, according to analysts. Still, it doesn’t mean gold won’t drop to even lower levels next week.

This week’s primary downward pressure came from rising U.S. Treasury yields mixed in with the stronger U.S. dollar.

“If you look at gold in a basket with other metals, it is only gold that has gone down. Silver is doing well, so are platinum, palladium, and rhodium. You are getting pretty significant consistent buying interest in white and industrial metals,” said Kitco Metals global trading director Peter Hug. “Gold has been affected because of the significant rise in the 10-year yield.”

The 10-year Treasuries’ yield started the week at 1.15% and rose to 1.33% by Friday. “This has taken some of the edge off gold because that rise in yields has produced strength in the U.S. dollar,” Hug explained.

The news headlines were also not too encouraging, with BlackRock choosing silver over gold and DoubleLine CEO Jeffrey Gundlach picking bitcoin over gold as a better “stimulus asset.”

Gold prices were falling all week long until they hit an 8-month low of $1,760.40 on Thursday, which triggered a small recovery. At the time of writing, April Comex gold futures were trading at $1,781.20, up 0.41% on the day.

Where to next?

Next week will be all about where the U.S. dollar moves, LaSalle Futures Group senior market strategist Charlie Nedoss told Kitco News. “Dollar strength could abate next week, and we could see gold bouncing off the bottom,” Nedoss said.

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