Stock Market

Gold slides below $1,800 an ounce after biggest weekly fall in 11 months

Gold futures remained under pressure to start the week, drifting below the $1,800 an ounce threshold on Monday.

Gold for June delivery
GC00,
-0.07%

GCM22,
-0.07%

fell $9.50, or 0.5%, to $1,798.70 an ounce on Comex, after dipping below $1,800 in Friday’s session when it closed at its lowest since Feb. 4. Gold logged a 3.9% fall last week, its largest since June 18, 2021, according to Dow Jones Market Data.

July silver
SIN22,
+1.19%

ticked up 0.4% to $21.095 an ounce after falling 6.2% last week, its largest such slump since late January.

Gold “has been a victim of a strong U.S. dollar and rising bond yields, making this non-interest-bearing commodity less appealing for yield seekers. Its performance has surprised many market participants, us included,” said Fawad Razaqzada, market analyst at City Index and Forex.com, in a note.

Gold came off its session low Monday as the U.S. dollar came off early highs. The ICE U.S. Dollar Index
DXY,
-0.13%

edged own 0.1% after trading near a 20-year high on Friday. A stronger dollar can be a negative for commodities priced in the unit, making them more expensive to users of other currencies.

Rising bond yields have also been a drag on gold. Treasury yields early last week traded near 3 1/2-year highs before pulling back.

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Gold’s weakness, however, has still been a surprise given persistently hot inflation readings, as well as the volatility seen in equity and crypto markets, which would have been expected to spur some haven-related demand for gold, Razaqzada said.

“Those seeking to protect their wealth being eroded by inflation must be equally surprised to see the metal trade around $1,800,” he wrote.

“While fundamentally I continue to remain positive towards gold, I just need to see a technical reversal pattern to confirm that prices have bottomed out. One such scenario would be if gold reclaims the broken trend line and goes back above $1850 resistance,” he said. “But first thing is first: it will need to defend support around $1800.”

In other metals trade, July copper
HGN22,
+0.24%

edged up 0.2% to $4.182 a pound.

July platinum
PLN22,
-0.49%

fell 1.4% to $917.40 an ounce, while June palladium
PAM22,
+1.45%

was off 0.7% at $1,904 an ounce.

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