Gold drifts lower to close out seesaw week
McGlone says the dollar price of gold will play catch up with other major currencies

(USAGOLD – 8/5/2-22) – Gold drifted lower this morning as it looks to close out a seesaw week featuring a great deal of uncertainty about where Fed policy and financial markets are headed next. It is down $4 on the day at $1790 but up over $100 (6.3%) from its pre-Fed meeting lows. Silver is down 8¢ at $20.18 but up $1.70 (8.7%) from its pre-meeting lows. Two days ago, we featured a quick comment on gold’s direction from Bloomberg Intelligence’s commodity analyst, Mike McGlone. Yesterday he elaborated more fully on that analysis on his Twitter feed:

“Gold appears more likely to resume its enduring upward trajectory and breach resistance at around $2,000 an ounce vs. sustaining below $1,700 support. Guidance may come from the metal denominated in the euro, which reached a new high in March. Typically, it’s a matter of time in dollar-based gold to follow new highs in other major currencies.… The most aggressive Fed tightening in 2022 since the 1980s has contained gold, and it’s a matter of time before rate hikes subside, letting the metal resume its path of least resistance upward.”

Gold price in euro, pound, yen, dollar
(%, one year)
overlay chart showing the gold price in major currencies, lagging in dollar
Chart courtesy of TradingView.com • • • Click to enlarge

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