Gold stable, trapped between dollar's strength and equities slump
- Gold´s decline reaches the 38.2% retracement of the December/January rally.
- The bearish potential of the bright metal increases, but break below 1,300.00 needed.
Gold prices are the most stable across the financial world, trading this Friday marginally lower, but within Thursday's range, as the rout in global equities prevents the commodity from plummeting on increased dollar's demand. Spot is currently trading at $1,315.30 a troy ounce, after bottoming for the week yesterday at 1,306.99, its lowest since Jan 4.
Wild swings extend to Treasury yields, which rose ahead of Wall Street's opening toward its recent multi-year highs, but are now down for the day, with the 10-year note yield at 2.81% from 2.85% yesterday, while the 30-year note shed just 1 basis point, currently at 3.13%.
Technical outlook
Spot gold is set to close with losses for a second consecutive week, but the movement seems corrective as the price is just below the 38.2% retracement of its December/January rally, measured from 1,236.43 to 1,34.52 at 1,316.30, suggesting that the decline may be corrective at current levels. Still, further declines that push the price below the 1,3000 threshold will fuel profit taking from the recent rally, resulting in lower lows for the next week.
Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
