Gold Dips But Not Far From 2-Week High, as Dollar Chugs Back to Life
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By Barani Krishnan
Investing.com — Gold prices retreated Thursday as the dollar resumed its upward trek after a five-day drop, taking some shine off bullion’s best showing in nearly two weeks during the previous session.
Gold was still headed for a weekly gain that would be its fourth of out five weeks.
Yet, it was nowhere near to recapturing the $1,800 level that technical chartists say would be crucial for it to shake off the malaise it had been trapped in since mid-August, on aggressive rate hike expectations by the Federal Reserve.
Gold’s benchmark futures contract on New York’s Comex, December, settled Thursday’s trade at $1,665.60 an ounce, down $3.60, or 0.2%. For the week, it showed a gain of 0.6%.
The spot price of bullion, which is more closely followed than futures by some traders, was at $1,662.07 by 16:00 ET (20:00 GMT), after a midday tumble to $1,654.91.
The Dollar Index, which pits the greenback against the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc, reached a session high of nearly 110.48, rising for the first time since Oct.19.
The dollar rallied as the U.S. economy turned positive for the first time in 2022 with a growth of 2.6% in the third quarter, after two prior quarters in the negative, according to the Commerce Department. Economists had forecast a growth of 2.4% for the latest quarter. A stronger economy will help the Fed carry on with aggressive rate hikes aimed at curbing the worst U.S. inflation in four decades.
Still, some said there appeared to be troubles with the U.S. economy despite its forecast-beating growth in the third quarter, and that could explain gold’s modest losses on Thursday.
“The strong headline number is welcome news, but when you dig into the numbers it is clear that an economic slowdown is here,” said Ed Moya, analyst at online trading platform, OANDA. “The international trade component helped this quarter and that obviously won’t continue going forward. Consumer spending is softening and prices are coming down quickly. Business investment is clearly weakening.”
