Gold Prices Struggle as U.S Dollar Surged Higher

The yellow metal pulled back below the $1950 support level on Friday as the U.S dollar surged higher. This dented the precious metal appeal and now looks on track for a second weekly drop, in spite of the lingering concerns over the path to global economic recovery.

Gold’s recent plunge came despite data showed the euro zone’s economic recovery from its deepest downturn on record paused in August.

In addition, a recent report on Europe’s biggest economy showed that economic activity, notably in its service sector, was sluggish in the month of August.

Adding to doubts over a swift economic recovery in the United States after the Federal Reserve officials on Wednesday warned its economic recovery had a blurred outlook.

That said, Gold traders have been able to maintain an important support level around $1,925 which is within the old record highs recorded in 2011.

Many stop-loss orders are most likely to be below that zone, meaning it’s very vital that Gold bulls keep this support area or a continual break in that support area could send the precious metal to the $1,875 area

The recent weakness in the US dollar’s relatively had attracted gold buyers, but as tempo for recovery rise coupled with soaring global equities and optimism on t the US-China trade deal, Gold bears would continue to exert pressure on the precious metal.

Also hopes of a renewed stimulus package deal, by the Democrats, seem to have awakened the Gold bears.

In the mid-term, the precious metal has been struggling to regain its $2000 form, especially when the U.S dollar softens but has not been able to keep the bullish run of late because of the U.S dollar bounce from its two year low.

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