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Gold prices retreat more than 1% as dollar halts slide
Gold chop down more than 1% in Thursday as the dollar stalled its slide, using analysts saying bullion may possibly face more resistance inside the bid to breach this $2,000 level.
Spot precious metal was down 1% at $1,951.38 per ounce by 1014 GMT. U.S. gold futures eased 0.5% to $1,943.50.
The dollar found a few support after the U.T. Federal Reserve in a insurance policy update offered no true clues about its future moves beyond a reiteration of easy monetary position.
Dollar bears had believed the Fed might weaken its approach to inflation.
“Buying sentiment towards the precious metal can fall in the short term, which might trigger a technical modification over the next few days,” FXTM analyst Lukman Otunuga said, attributing gold’s slide to a “stabilizing dollar.”
Gold jumped to next to a record high on Wednesday following the Fed pledged to keep car finance rates near zero. But original gains in equities brought by Wall Street overnight, and after this a bounce in opponent safe:haven the dollar – making gold less appealing to holders of other currencies – cut short the climb.
But the non-yielding metal, which benefits from low interest and is considered insurance against currency debasement and high inflation, is still up over 28% this year, supported by strong investment demand from Europe and North America, that has offset weak physical consumption in top Asian hubs.
“The macro environment remains quite friendly for gold – there’s plenty of geopolitical risks and the monetary accommodation is still very significant across many central banks,” Bank of China International analyst Xiao Fu said.
“It’s just that $2,000 is very strong psychological resistance level and people really are a bit nervous about gold’s valuation.”
Prices might test support at $1,943 per ounce, said Reuters technical analyst Wang Tao.
Other metals too joined the slide, with silver shedding 4.3% to $23.36 per ounce, platinum down 2.4% to $902.17 and palladium 4.3% to $2,065.63.