Gold prices settle at their lowest level of the year as the dollar index climbs toward a 20-year high
By Myra P. Saefong and Joseph Adinolfi
Silver futures end at 2-year lows
Gold on Tuesday fell below the key $1,800-an-ounce level to settle at its lowest price so far this year, while silver futures ended at a two-year low, on back of a rise in the U.S. dollar index toward a 20-year high.
What analysts are saying
Naeem Aslam, chief market analyst at AvaTrade, blamed the dollar's moves for driving price action in gold.
The greenback traded at a new 22-year high against the euro on Tuesday, with one dollar buying roughly 1.03 euros. The ICE U.S. Dollar index was up 1.5% at 106.66, trading around the highest levels since November 2002.
Minutes from the Federal Reserve Open Market Committee's June meeting, due out on Wednesday, as well as the monthly data on U.S. nonfarm payrolls, due Friday, are the "two most important events for the yellow metals, which are likely to bring significant volatility to the price," said Aslam, in market commentary.
Meanwhile, Jim Wyckoff, senior analyst at Kitco.com, said technical indicators in recent trade for both gold and silver are now "fully bearish."
"The metals are feeling the pressure of a stronger U.S. dollar index that notched a 20-year high overnight," Wyckoff added.
At the current prices, gold and silver are "good long-term bargains," but on a short-term basis, traders will need to "wait and watch," said Chintan Karnani, director of research at Insignia Consultants.
He said he has advised his clients to use the price crashes in gold and silver, ahead of the release of the nonfarm payrolls data on Friday, to "go long or invest with a stop loss below the week's low."
-Myra P. Saefong
(END) Dow Jones Newswires
July 05, 2022 14:04 ET (18:04 GMT)
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