By Barani Krishnan
Investing.com – Gold took a fresh hard tumble beneath the key $1,800 an ounce level on Wednesday before settling in the red again for a fourth day in a row as a rebounding dollar capped a comeback by the yellow metal.
on New York’s Comex closed down $5, or 0.3%, at $1,793.50 an ounce. Prior to settlement, it fell to $1,783.75 — its lowest since Aug. 27 — after an intraday high of $1,804.35.
On Tuesday, December gold lost $35, or 2%, for its sharpest one-day slide in a month.
Despite going somewhat down the same path as a day earlier, gold cut its losses on Wednesday after demand for a 10-year Treasury auction sent bond yields lower.
John Williams, president of the New York Federal Reserve also generated fresh hawkish pressure for stocks after he called for a taper as soon as possible of the central bank’s 18-month long stimulus.
Yet, gold couldn’t capitalize on these elements to settle above $1,800.“Gold needs both Wall Street to believe we have seen the high in Treasury yields for the year and for some institutional investors to lose confidence in cryptocurrencies,” said Ed Moya at New York’s OANDA. “Bullion traders are hesitant to buy the dip right now and may wait to see signs from central banks that further stimulus is likely to address the recent deceleration.
”So long as gold remained below $1,800, it was at risk of falling to $1750 or below, Moya said.“
Gold remains in the danger zone as the dollar continues to rally on safe-haven flows,” he added.
Gold’s latest malaise came on the back of a dollar’s rebound as the greenback put in a recovery after a six-day battering that climaxed with Friday’s U.S. jobs report for August that came in almost 70% below target.
Rightly, gold should have retained its mojo from last week but yielded instead to the dollar, said Sunil Kumar Dixit of SK Charting in Kolkata, India.
“Gold’s path from here will depend on how DX acts,” Dixit said, using the trading symbol for the , which pits the greenback against six other forex majors.
“Gold is currently trapped between $1,797 and $1,803. This six dollar range will decide how gold will perform next,” added Dixit. “If it continues going below 1797, it will likely be headed for $1,770. If it can sustain above $1,797 and break beyond $1,803, it can again climb to $1,825.”
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by : Investing.com