Yahoo Finance Gold: Bears Eye Sub-$1,600 as Dollar Flies
By Barani Krishnan
Investing.com -- The dollar is in flight and that’s basically gold’s plight.
The rally in the U.S. currency showed no signs of slowing on Monday as the Dollar Index, which is pitted against the euro and five other rivals, reached another 20-year high on the back of relentless hawkish chatter by Federal Reserve officials trying to talk down inflation.
Monday’s peak of 114.42 for the so-called DX trading symbol of the index marked a peak since May 2002, when it reached a high of 115.47.
There’s still some way for the Dollar Index to go; it reached a high of 121.29 in July 2001.
As the U.S. currency takes out one peak after another, things are getting uglier for gold though.
Gold’s benchmark futures contract on New York’s Comex, December, settled Monday’s trade down $22.20, or 1.3%, at $1,632.50 per ounce.
The session low of $1,628.90, marked a bottom since April 2020, when gold’s benchmark futures then plumbed $1,576.
The spot price of bullion, which is more closely followed than futures by some traders, was down $19.51, or 1.2%, to $1,624.06. Spot gold’s bottom for the day was $1,621.85.
As September winds to a close and the final quarter of 2022 beckons, gold bulls basically stare at a loss of more than 5% for the month and a drop of almost 10% for the third quarter.
The irony is much of those losses have come within the past two weeks, as gold took out one support after another snapping the $1,740 support.
Now, the target for bears seems to be the low $1,600s or even sub-$1,600.
“We are exploring minor support at $1,616 and $1,602,” said Sunil Kumar Dixit, chief technical strategist at SKCharting.com. “Major support will be $1,560, which marks a 50% Fibonacci retracement of the long term upwave from $1,040 to $2,073.”
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