By Barani Krishnan
Investing.com – Gold fell a fourth straight day on Friday, losing 2% on the week and plumbing lows near $1,920 in a slide that raised questions on how much volatility was in store for the metal that hit $2,000 earlier in the week.
“The core bias remains to view this as consolidation in the core bull trend, with eventual new highs expected above $2,075/80, with resistance then seen at $2,300,” Credit Suisse (SIX:) said in a note. “But, they do not look for a rush back to new highs and believe investors should be prepared for a lengthy sideways phase. Key support for gold stays seen at $1,887/37.”
on Comex settled Friday’s regular New York session down $3.50, or 0.2%, at $1,934.30 per ounce. The benchmark U.S. gold futures contract lost $40 over the week from an unexpected surge in the dollar — despite a drop in bond yields from earlier in the week that questioned the greenback’s rally.
In Friday’s trade, the was, however, helped by a positive . The also jumped a whopping 15% on the day, setting the stage for weaker gold prices.
Gold, however, recouped its losses in “after-hours” trade in New York, with the December contract on Comex rising $5.60, or 0.3%, to $1,943.40 by 3:00 PM ET (19:00 GMT).
The , which reflects real-time trades in bullion, was also higher by the same hour, trading at $1,935.60 to show a gain of $4.59 or 0.2%.
Gold has been beset with volatility since returning to the $2,000 territory on Tuesday for the first time in 10 days.
For the yellow metal to recapture its “July momentum” which delivered such highs, a new coronavirus stimulus bill might be needed. The Trump administration has haggled for weeks on the size of the bill, which rival Democrats think should be around $2 trillion versus the White House’s plans for a package that might be four times smaller.
On the contrary, the dollar could get stronger if next week’s meeting of the European Central Bank transmitted dovish signals on the — the main forex rival to the greenback.
“Another week and another deluge of headlines saying the U.S. government have not agreed on a fiscal deal. The negotiations are still continuing but there has been no word of any resolution any time soon,” said Rajan Dhall at FXStreet. “The market will be interested to find out if the ECB are willing to look at more stimulus.”
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by : Investing.com