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Gold: Bears Eye Sub-$1,600 as Dollar Flies

Commodities Sep 26, 2022 04:25PM ET
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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.”

Gold: Bears Eye Sub-$1,600 as Dollar Flies
 

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Comments (6)
Liam LL
Liam LL Sep 26, 2022 8:08PM ET
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Just because of crazy dollar. How far dollar could move forward, how bear the gold is. For long time investing, gold is still standing long.
Stan Smith
Stan Smith Sep 26, 2022 7:13PM ET
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The Dollar is done... it will be the last currency standing before investors realize how devalued it has become and rush into the only store of value left... Precious Metals!!
Barani Krishnan
Barani Krishnan Sep 26, 2022 7:13PM ET
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If DX gets beyond 121, it'll be a new high.
Albert Andrew
Albert Andrew Sep 26, 2022 7:13PM ET
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We hope it gets to the right hand
Alan Rice
Alan Rice Sep 26, 2022 6:05PM ET
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Invest at your own RISK.
Alan Rice
Alan Rice Sep 26, 2022 6:04PM ET
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Let's see if there is support at Au $1200. 10/27/22. yhg4538976ii
SC RJ
SC RJ Sep 26, 2022 4:44PM ET
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Gold will fall to $1602, as Dollar will remain supreme and weak for Russia plus China in Oil & Gold
Warm Camp
Warm Camp Sep 26, 2022 4:35PM ET
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Safe haven, still?
Barani Krishnan
Barani Krishnan Sep 26, 2022 4:35PM ET
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Essentially, yes. That doesn't change though DX is top dog now.
Warm Camp
Warm Camp Sep 26, 2022 4:35PM ET
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Barani Krishnan  If you repeat “safe haven” for very long time, then some day it can come true. On that day only, while folks investing in gold stocks could be bankrupt already by that point. Truly safe sailing.
 
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