Gold price on track for second weekly decline

Credit: Wikimedia Commons

Gold remains under pressure — falling by as much as 1.6% on Friday — as the US dollar bounced back, denting bullion’s appeal and setting it on track for a second straight weekly decline.

Spot gold fell 0.6% to $1,934.59 per ounce by 12:10 p.m. EDT, while US gold futures slid 0.3% to $1,945.90 per ounce. For the week, the precious metal is down 0.3%, having dropped more than 3% earlier this week following release of US Federal Reserve’s latest policy meeting minutes.

“The dollar has made a lot ground over the past few days and it really has taken the edge off gold,” OANDA analyst Craig Erlam spoke with Reuters. He added that “while on the upside $2,000 is now a big barrier and $1,860 could be a bit of test prior to that.”

“For the time being we have seen the high in gold … until something happens either on the US stimulus front in terms of the relief package or the US-China tensions take a very positive or negative turn,” said David Madden, market analyst at CMC Markets UK.

“We are above $1,900 so I wouldn’t be too fearful. I think this is going to be the end of the dollar rally and it’s just going to be a correction in the wider upper trend which is still intact,” Madden added.

Still, gold has gained nearly 30% this year, propelled by low interest rates globally and widespread stimulus from central banks to mitigate the impact the coronavirus had economies. These measures have helped to support the metal that is often considered a refuge from inflation and currency debasement.