Global financial markets are closely watching the price of gold as it remains below the crucial $2,000 per ounce threshold. The Biden administration's positive outlook on reaching a debt ceiling deal with Republican leaders in Congress has exerted downward pressure on the precious metal, which is often considered a safe haven during economic and political uncertainties.
Adding to gold's challenges are the strengthening Dollar Index and the rising yield on the 10-year U.S. Treasury note. These factors have contributed to the metal's struggle to regain momentum and stay above the support level of $1,975.
Technical analysts emphasize the significance of this level, with Sunil Kumar Dixit, chief technical strategist at SKCharting.com, stating, "If it gets below $1,975, the way would be open for $1,965 and $1,942 even. So long as it stays above that level, there's a chance of it returning to $2,000 in the not-too-distant future."
On the New York Comex, June gold futures settled at $1,984.90 per ounce, marking a 0.5% decline from the previous session. The intraday low reached $1,978.35. Tuesday saw a 1.5% drop for June gold futures, which had reached a record high of $2,085.40 on May 4.
Meanwhile, the spot price of gold, which reflects physical trades and garners significant attention from traders, stood at $1,983.49 by 13:40 ET (17:40 GMT). This represented a 0.3% decline. Spot gold had previously achieved an all-time high of $2,073.29 earlier this month.
While gold continues to face headwinds, its ability to avoid breaching the critical support level offers hope for a potential rebound towards the $2,000 mark in the near future. Investors will closely monitor the outcome of the debt ceiling negotiations and other market factors to gauge the metal's future performance.
