Gold prices dropped below the psychological threshold of $1,800 on Friday, and were set for a third straight weekly loss, as the dollar strengthened and India raised its import tax on the metal to curb inflows.
Spot gold fell 0.7% to $1,794.10 per ounce by 0752 GMT, after it hit its lowest since May 16 at $1,791.30. US gold futures dipped 0.6% to $1,796.10.
Reuters’ technical analyst Wang Tao said a break in spot gold below support at $1,801 per ounce could lead to a fall to $1,784.
The dollar firmed towards recent two-decade peaks, making gold less attractive for buyers holding other currencies.
India has raised its basic import duty on gold to 12.5% from 7.5%, the government said on Friday, as the world’s second biggest consumer of the precious metal tries to curb its demand and bring down the trade deficit.
Bullion prices, coming off their worst quarter since early 2021 amidst aggressive monetary policies from top central banks, have lost about 1.6% this week.
Gold, catching a downdraft from the deflated commodity super-cycle, driven by front-loaded Federal Reserve rate hikes and a strong US dollar, is underperforming despite lower Treasury yields, said Stephen Innes, managing partner at SPI Asset Management.
Benchmark US 10-year Treasury yields hit their lowest level since June 6.
Spot gold may retest support at $1,812
Investor preference for cash and wealth preservation could see gold lower before what should be an expected recovery when recession hits and central banks need to ease, Innes said.
Higher interest rates and bond yields raise the opportunity cost of holding bullion, which yields nothing.
Spot silver slipped 2.1% to $19.83 per ounce, and has dropped about 6.2% this week, its most since late-January.
Platinum dipped 1.2% to $883.50, and faces a fourth consecutive weekly fall. Palladium dropped 0.8% to $1,920.96, but has gained about 2.5% this week.
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