February 26, 2024

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Gold ends down 3rd day, clinging to $1,940 support

2 min read

Investing.com — Gold ended down for a third straight day as expectations for a higher U.S. debt ceiling took more shine away from the safe haven.

But the yellow metal’s hold above the technical support of $1,940 kept alive hopes of market bulls in returning to $2,000 level.

Gold for June delivery on New York’s Comex settled at $1,959.80 an ounce, down $25.10 or 1.3%, after a session low at $1,954.45. The benchmark gold futures contract hit an all-time high of $2,085.40 on May 4.

The spot price of gold, which reflects physical trades in bullion and is more closely followed than futures by some traders, was at $1,956.95 by 14:50 ET (18:50 GMT), down $24.65, or 1.2%. Spot gold’s session low was $1,952.03. It hit a record high of $2,073.29 earlier this month, according to Investing.com data.

“If gold breaks below 1,942 without any significant recovery, the midterm trend turns bearish calling for a deeper correction,” said Sunil Kumar Dixit, chief technical strategist at SKCharting.com.

But even if that support was breached, “some bounce back from the lows can be witnessed taking gold to at least [the] $1,975-$1,986 zone”, Dixit said.

He, however, added that gold bulls would have trouble catching a break so long as the dollar continued its charge higher. The Dollar Index hit a seven-week peak of 103.485 on Thursday amid optimism over a U.S. debt ceiling agreement being struck to avert a potential default before June 1.

“As the Dollar Index continues to rise, gold bears are having a good time pushing gold deeper into $1,952,” said Dixit. “Some further drop to the 50% Fibonacci level of $1,942 seems more likely than before.”

Analysts at UBS forecast that gold would hit $2,100 by the year-end and $2,200 by March 2024, urging investors to keep the yellow metal as among top picks in their portfolio.

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