Gold Price Still Under Pressure Near $1800

Gold retreated to the $1,799 level on Friday, the lowest since February 2022. Recovery followed later to find resistance shortly at $1,820. US shares are sharply rising on Friday, on a recovery rally. Crude oil prices also hit gains. US yields settled and the US dollar is correcting lower. Usually, in an environment like this, circumstances should be positive for gold, but it only helps the precious metal stay above $1,800.

On the contrary, Silver is recovering up to the 21.00 level and is generally positive on Friday up 1.50%, while on a weekly basis it is down almost 6%, about to post the lowest close since July 2020.

Both gold and silver have remained under pressure in the current environment of higher interest rate, hawkish monetary tightening in addition to a weaker growth outlook and financial tensions. The technical perspective offers no improvement as the only positive is the extreme oversold readings in technical indicators. There is no sign of a rebound or a consolidation yet.

Gold is about to post a weekly decline of almost 4%, the second worst performance in 2022 and a close below the 20-week moving average, for the first time since January.

A prolonged weakening of the US dollar does not seem likely in the current market environment. The factors that have been driving the greenback’s valuation, namely the ongoing Russo-Ukrainian conflict, heightened inflation fears because of China’s lockdowns and the Fed’s tightening trend, all factors should remain intact next week. Hence, it would be reasonable to expect that gold’s recovery attempts are likely to remain limited in the short term.