Gold prices jump above $1800/ounce, drops 2% W/W

The yellow metal stayed above $1,800 an ounce at the last trading session of the week after tumbling beneath the key support level a day ago.

Still Gold finished the week down some 2% due to setbacks dealt by the surging dollar and rising U.S. Treasury yields.

• Gold traders are battling hard in support of the bullion asset to hold the $1,800 line amid recent price actions reading revealing “a significant build in gold shorts could trigger a drop towards the $1,750 level.
• Gold futures settled up $1.2%, at $1,813.05. It had dropped as low as $1,784.60 on Thursday after a third straight weekly decline in U.S. jobless claims created the impression that the labor market in the world’s largest economy may be suffering from exhaustion

READ: Gold suffers its worst January performance since 2011 amid rising U.S dollar

Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics spoke on the prevailing macros weighing hard on gold relatively;

“The current climate has been brutal for gold. The US dollar has been rallying for most of the week, equities on the front foot and steepening the yield curve. Stimulus and pandemic optimism could lead the US Federal Reserve to start tightening monetary policy a little earlier than expected, and gold could drop further.

“The yellow metal has posted its largest drop since early January, falling >2% to below the key $1800 level, back to where it was in November. There is support at $1764, while a rally could reclaim $1800, before $1811 and $1838.”

READ: Gold prices pull back after hitting highest levels in 2 weeks

What to expect:  Gold traders would be watching to see if the precious metal would again breach below $1800/ounce price level with Silver in tow it could trigger a larger precious metal meltdown where then gold momentum might feed off Silver’s sell-off.