Are we witnessing a collapse in the price of gold?

Gold prices fell, during today’s session, Friday, to stay near the important level of $ 1,800 an ounce, under pressure from a stronger dollar.

And gold fell 0.3% in spot trades to $ 1,799.46 an ounce, at 5:17 a.m. GMT, and is heading towards recording the worst weekly performance since mid-June 2021.

US gold futures fell 0.4% to $ 1,802.50 an ounce.

Are we witnessing a collapse in the price of gold?

“If we get a mix of really strong jobs numbers that stem from some monetary tightening rhetoric from the Federal Reserve, I think that would scare off any interest rate sensitive markets,” said Stephen Innes, partner. director at SBI Capital Asset Management. like gold “.

“This is why we are currently seeing a reduction in risk,” he added, but added that a full collapse in gold is highly unlikely and the support level of $ 1,790 is expected to hold. .

Concerns about a gradual reduction in stimulus measures began after Richard Clarida, vice chairman of the US Federal Reserve (Central Bank) said the conditions for an interest rate hike could be in place by the end of 2022 and that the central bank could start reducing its assets. purchasing program this year.

Rising interest rates reduce the opportunity cost of owning the yellow metal, which does not generate a return. The dollar index rose 0.1%, reducing the attractiveness of gold for holders of other currencies.

As for other precious metals, silver stood at $ 25.12 an ounce and fell 1.4% on the week. And platinum fell 0.4% to $ 1,001.66 an ounce and is heading towards recording the biggest weekly drop since June 2021.

Palladium rose 0.2% to $ 2,652.93.

Source: Reuters

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