Investing.com — Gold bulls are still counting on another record high if the Chicken Little metaphor of saving the world — or more precisely, the U.S. economy, from a government debt default or recession — doesn’t come true. Yet, the path of least resistance for the yellow metal over the past three weeks has been lower.
on New York’s Comex settled Friday’s session at $1,944.30 an ounce, up just 60 cents, or 0.03%, on the day. The benchmark gold futures contract fell to a nine-week low of $1,936.90 earlier in the session, after hitting an all-time high of $2,085.40 on May 4. For the week, June gold was off 2% after another 2% loss the prior week and 0.25% the week before that.
The , which reflects physical trades in bullion and is more closely followed than futures by some traders, was at $1,945.04 by 14:00 ET (18:00 GMT) on Friday, up $4.19, or 0.2% on the day. Spot gold fell to a three-week low of $1,936.85 during the session, after a record high of $2,073.29 earlier this month, according to Investing.com data. For the week, spot gold was down 1.7%, after another 1.7% loss the prior week and 0.3% the week before that.
“The short term trend has turned bearish and unless we see signs of a rebound, which requires strong acceptance above the 38.2% Fibonacci level of $1,975 on a weekly closing basis, a further drop to 61.8% Fibonacci level $1,910 can hardly be ruled out,” said Sunil Kumar Dixit, chief technical strategist at SKCharting.com.
“But there’s a possibility of gold buyers resurfacing at the test of $1,926 and $1,910 if gold drops to this zone,” Dixit added.
Craig Erlam, analyst at online trading platform OANDA, was also in the camp of a cracked upside for gold that wasn’t entirely broken.
“Gold’s rough week is ending as some investors seek protection in case debt ceiling talks hit a major roadblock at the 11th hour,” Erlam said. “It is crunch time for [Washington] DC and a possible TARP scenario [from 2008] could occur when Congress initially failed to pass the bank bailout program, which is why some traders are running to gold ahead of the long weekend. If it weren’t for another round of hawkish [inflation] data, gold would be finishing the week on a much stronger note.”
President Joe Biden declared Thursday the United States would avoid a disastrous credit default even as lawmakers went on a 10-day break without a deal on raising the nation’s borrowing limit to keep paying the bills. There…
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