Gold’s Glitter Fades with 4th Weekly Loss, Plunge Below $1,800

By Barani Krishnan

Investing.com — The saying goes that all that glitters isn’t gold, and currently, the yellow metal itself is not shining brightly.

During Friday’s trading session, gold briefly dipped below the critical $1,800 mark on New York’s Comex, intensifying its decline. Although gold managed to regain the $1,800 level after finding support around the $1,700 region, this recovery was insufficient to compensate for the losses experienced earlier in the week, which resulted in a total decline of approximately $165, or 8%, since the week ending April 8.

The recent drop in gold prices can be attributed to a strengthening dollar, which has reached new highs not seen in 20 years. The dollar index, which compares the U.S. currency against six major rivals, fell to a session low of 104.5 after peaking at 105.05. This brief retreat did allow gold to recover some losses; however, it had minimal impact on the overall momentum of the dollar. Analysts anticipate the dollar will continue to rise based on speculation regarding how aggressively the Federal Reserve might increase interest rates in the near future.

"Only a sudden U.S. dollar sell-off is likely to change the bearish technical outlook for gold," noted Jeffrey Halley, who oversees research for the Asia-Pacific markets.

On Comex, gold settled at $1,808.20 per ounce, down $16.40, or 1% for the day. The lowest point of the session was $1,797.45, a level not seen since January 30. Week-to-date, June gold has declined by 4%.

Despite Friday’s rebound, experts warn that if gold fails to break through a series of resistance levels between $1,832 and $1,836, and further at $1,844 and $1,856, it could see prices revert to the $1,700 range. Sunil Kumar Dixit, chief technical strategist, cautioned that sellers are likely to emerge if these resistance levels are tested.

"Decisive closing above this range could extend the recovery to $1,880, but failing that, bearish pressures may push gold down to $1,800 – $1,780, and potentially extend the decline to $1,760 in the upcoming week," Dixit added.