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Lately, gold has failed to attract safe-haven flows despite growing recessions risks as investors have instead opted for the US dollar, which has marched to fresh two-decade highs amid rising bets on aggressive rate hikes by the US Federal Reserve.
The notion of another 75-basis-point rate hike by the Fed gained further traction following the latest employment data, which showed US job growth increased more than expected in June and the unemployment rate remained near pre-pandemic lows.
“The jobs data pushed down gold, already struggling after such a strong dollar rally. However, there is some bargain hunting coming through in gold here,” RJO Futures senior market strategist Bob Haberkorn, said in a Reuters note.
In its mid-year 2022 outlook report, the World Gold Council recently stated that gold, given its strategic and tactical role as a hedging asset, will likely remain relevant to investors during the second half of the year, particularly while uncertainty is elevated.
On the technical front, gold’s break below the $1,760 level could signal a further slide to $1,720, and potentially towards the 2021 lows near $1,680, said Michael Hewson, chief market analyst at CMC Markets UK.
(With files from Reuters)
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