Gold Hovers Below $1,600 as Dollar Soars

The Dollar Index, pitted against the euro and five other rivals, hit a 20-year high on Monday amid relentlessly hawkish speeches from Federal Reserve officials seeking to curb inflation, while the rally in the US currency showed no signs of slowing.

Monday's peak of 114.42 for the so-called DX symbol of the index marks the highest level since May 2002, when it reached 115.47. The Dollar Index still has a way to go; it reached a high of 121.29 in July 2001. While the US currency is making one peak after another, things are getting uglier for gold. The December gold futures contract on the New York Comex settled down $22.20, or 1.3%, at $1,632.50 an ounce in Monday's trading. The session low of $1,628.90 marks the bottom since April 2020, when gold's benchmark futures fell to $1,576. The spot price of gold bullion, which is followed more closely than futures by some traders, fell $19.51, or 1.2%, to $1,624.06. Spot gold hit the day's low at $1,621.85. As September ends and the last quarter of 2022 approaches, gold bulls are basically looking at a loss of more than 5% for the month and a drop of almost 10% for the third quarter. The irony is that most of these losses have come in the last two weeks, with gold breaking the $1,740 support one after the other. Now the target for the bears seems to be below $1,600 or even below $1,600. "We are looking for minor supports at $1,616 and $1,602," said Sunil Kumar Dixit, chief technical strategist at SKCharting.com. "The main support will be $1,560, marking the 50% Fibonacci retracement of the long-term bullish wave from $1,040 to $2,073." Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!