Gold Falls to $1,810 As Precious Metal Erases All 2022 Gains

Gold futures plunged on Friday, officially erasing all of their 2022 gains. The yellow metal has come under intense pressure this month, buoyed by the Federal Reserve’s tightening endeavors, a stronger US dollar, and rising Treasury yields. For now, it appears the bull market is over, even if inflation skyrockets.

June gold futures tumbled $14.30, or 0.78%, to $1,810.30 an ounce on the New York Mercantile Exchange. Gold prices dropped 3.85% on the week, bringing their year-to-date decline to around 1%.

Silver, the sister commodity to gold, joined the broader market rally to close out the trading week. June silver futures rose $0.352, or 1.69%, to $21.125 an ounce. The white metal plunged more than 5.5% this week, adding to its 2022 slide of nearly 10%.

Overall, gold prices are trading at their lowest levels in 14 months. Moreover, gold is below the 200-day moving average, which is typically considered a bearish component. But will the precious metal sustain this downward trend? Not exactly, some market analysts suggest.

The near-term price target is still in the range of $1,850 and $1,905 per ounce. A bullish price point could be $2,500, says Alex Kuptsikevich, senior market analyst at FxPro, in a research note.

“Potentially, a reversal to the upside from these levels could signal the start of a new wave of long-term growth, the first impulse of which was in 2018-2020, followed by a prolonged wide side trend,” he said. “A potential bull target, in this case, could be the $2,500 area.”

Investors were selling off gold due to the rally in the equities arena and soaring yields.

The Dow Jones Industrial Average and the Nasdaq Composite Index each added more than 400 points, while the S&P 500 jumped about 100 points.

The US Treasury market was green across the board, with the benchmark 10-year yield up 11.1 basis points to 2.928%. The one-year bill advanced 6.2 basis points to 1.958%, while the 30-year bond added 11.7 basis points to 3.088%.

Gold is generally sensitive to a rising-rate environment because it lifts the opportunity cost of holding non-yielding bullion.

The greenback weakened as the US Dollar Index (DXY), which is a gauge of the buck against a basket of currencies, tumbled 0.37% to 104.47, from an opening of 104.77.

A weaker greenback is good for commodities priced in dollars because it makes it more expensive for foreign investors to purchase.

In other metal commodities, June copper futures surged $0.064, or 1.56%, to $4.1645 per pound. June platinum futures dipped $0.60, or 0.06%, to $930.80 an ounce. June palladium futures advanced $64.90, or 3.49%, to $1,925.50 per ounce.

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