By NewsBlogger Gold prices experienced a significant decline in Asian trade due to a rise in the value of the dollar following a surprise interest rate cut by the Swiss National Bank, with analysts setting a year-end price target of $2,300 per ounce.
At a glance
- Gold prices declined in Asian trade due to a strong dollar after the SNB rate cut.
- Spot gold fell to $2,173.62 per ounce, while gold futures dropped to $2,174.90 per ounce.
- Pressure on gold increased with dollar index reaching a three-week high
- Analysts set a year-end price target of $2,300 per ounce for gold
- Positive risk sentiment and hopes for a ceasefire in Gaza impacted gold prices
The details
Gold prices significantly declined in Asian trade on Friday due to a sharp increase in the dollar’s value following the Swiss National Bank’s surprise interest rate reduction.
Earlier in the week, gold had reached record highs, surpassing $2,200 per ounce.
However, spot gold fell by 0.4% to $2,173.62 per ounce, while gold futures expiring in April dropped nearly 0.5% to $2,174.90 per ounce.
Substantial gains in the dollar further exacerbated the pressure on gold, with the dollar index reaching a three-week high above 104.
This surge in the greenback was fueled by the unexpected rate cut by the SNB and dovish signals from the Bank of England.
Additionally, indications of resilience in the U.S. economy steered traders toward the dollar.
Investing in precious metals like gold does not yield direct returns.
Analysts at Citi have set a year-end price target of $2,300 per ounce for gold.
In contrast, platinum futures fell by 0.7% to $905.10 per ounce, while silver futures slid by 1% to $24.758 per ounce.
Three-month copper futures on the London Metal Exchange experienced a 1% decline to $8,882.0 per ton, with one-month U.S. copper futures dropping by 1.2% to $4.0175 per pound.
The downward pressure on copper was influenced by deteriorating sentiment towards China, as major Chinese copper refiners announced plans to reduce output, tightening the market outlook.
In the European trading session, the gold price (XAU/USD) continued to diminish as the U.S. Dollar (USD) reached a three-week high, impacting the price of gold.
Positive risk sentiment and hopes for a ceasefire in Gaza placed additional pressure on gold.
The Federal Reserve projected a less restrictive policy stance, with three anticipated interest rate cuts for 2024. However, the decrease in U.S. Treasury bond yields could potentially provide support to gold prices.
Traders are advised to await robust selling momentum before positioning for further depreciation.
Technical analysis reveals support levels at $2,166, $2,146, and $2,128-$2,127, with resistance observed at the $2,200 threshold and the potential to challenge the record high at $2,223. The Relative Strength Index (RSI) on the daily chart continues to indicate overbought conditions.
Following a record high earlier in the week, the gold price (XAU/USD) retreated, currently hovering slightly above the $2,200 mark during the European session.
The positive sentiment influenced profit-taking activities surrounding gold in equity markets.
The marginal increase in U.S. Treasury bond yields also impacted gold prices.
Moreover, the Federal Reserve’s projection of three interest rate cuts this year limited the downside potential for gold.
Traders are closely monitoring flash PMIs and U.S. macro data for short-term trading opportunities.
Technical analysis suggests a breakout through a bullish flag chart pattern, with the RSI above 70, indicating a potential consolidation or pullback before further appreciation.
Support levels for the gold price are identified at $2,200-$2,190, $2,160-$2,158, $2,146, and $2,128-$2,127, with a probable decline to the $2,100 mark in the future.
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| uk.investing.com |
|---|
| – Gold prices fell in Asian trade on Friday |
| – The drop was due to a sharp uptick in the dollar following a surprise interest rate cut by the Swiss National Bank – Gold had surged to record highs above $2,200 an ounce earlier in the week – Spot gold fell 0.4% to $2,173.62 an ounce – Gold futures expiring in April fell nearly 0.5% to $2,174.90 an ounce – Pressure on gold came from sharp gains in the dollar, with the dollar index hitting a three-week high above the 104 level – The greenback rose due to a surprise rate cut from the SNB and dovish signals from the Bank of England – Signs of resilience in the U.S. economy also kept traders geared towards the dollar – Investing in precious metals such as gold offers no direct yields – Strength in the dollar is expected to limit major upside in bullion until the Fed begins trimming interest rates later this year – Citi analysts set a year-end price target of $2,300 an ounce for gold – Platinum futures fell 0.7% to $905.10 an ounce – Silver futures slid 1% to $24.758 an ounce – Three-month copper futures on the London Metal Exchange slid 1% to $8,882.0 a ton – One-month U.S. copper futures sank 1.2% to $4.0175 a pound – Copper was pressured by worsening sentiment towards China – Major Chinese copper refiners planned to curb output this year, tightening the outlook for copper markets |
| fxstreet.com |
|---|
| – Gold price (XAU/USD) is losing ground in the European session on Friday – US Dollar (USD) is at a three-week high, impacting the price of gold – Positive risk tone and hopes for a ceasefire in Gaza are putting pressure on gold – The Federal Reserve (Fed) projected a less restrictive policy stance and three interest rate cuts for 2024 – US Treasury bond yields are down, which could support gold prices – Waiting for strong follow-through selling before positioning for further depreciation is advised – Technical analysis suggests support levels at $2,166, $2,146, and $2,128-2,127 – Resistance is seen at the $2,200 mark, with potential to challenge the record high at $2,223 – The Relative Strength Index (RSI) on the daily chart is still showing overbought conditions |
| fxstreet.com |
|---|
| – Gold price (XAU/USD) retreated after reaching a record high earlier in the week – Currently trading just above the $2,200 mark during the European session – Profit-taking around gold due to a positive tone in equity markets – US Treasury bond yields slightly increasing, impacting gold prices – Federal Reserve projected three interest rate cuts this year, limiting downside for gold – Traders are looking at flash PMIs and US macro data for short-term opportunities – Technical analysis shows a breakout through a bullish flag chart pattern – Relative Strength Index (RSI) above 70, suggesting a possible consolidation or pullback before further appreciation – Support levels for gold price at $2,200-2,190, $2,160-2,158, $2,146, and $2,128-2,127 – Potential for gold price to decline to $2,100 round figure in the future |
