Gold Deteriorates To $1708

Gold is lacking momentum at the moment as prices trend lower towards $1,700 an ounce, but some analysts still believe that chances for further downside are limited.

Gold prices are modestly down on Wednesday but off lows. During the US session, gold briefly rebounded from the one-month low at $1,709 and rose to $1,723. Then, gold futures fell again to trade at $1,708 per ounce at the time of writing.

The US dollar’s strength caused a lot of pain on gold prices over the summer, forcing the precious metal to end August with the fifth monthly loss. While the US dollar index traded near 20-year highs on hawkish Fed stance, December gold futures dropped to below $1,800 an ounce and were last trading at $1,722.50.

However, the good news for gold is that it is not expected to fall much further because most of the downside risk has already been priced in.