Gold has brush again with $1,900; Lives to survive another day at that support

© Reuters.

Investing.com — For a second day in a row, gold came close to testing the $1,900 support. And once again, it managed to stay above that fray as buyers turned up to rescue the yellow metal from the cusp of $1,800 territory.

Gold’s latest challenge as the Dollar Index hit a one-week high to reclaim the 105 berth. The currency shot up as U.S. producer prices and retail sales for August came in higher-than-expected.

This week has been particularly difficult for gold with a series of forecast-beating U.S. inflation data, beginning with Thursday’s Consumer Price Index reading for last month, which showed a growth of 3.7% year-on-year versus the forecast 3.6%.

The dollar was also skewed higher from an ECB rate hike on Thursday that kept alive expectations that the Federal Reserve will follow suit with its own increase — if not at next week’s rate decision, then at least in November or December.

The spot price of gold, which traded as high as $1,930.90 an ounce at one point Monday, fell to as low as $1,901.01 in the latest session. By late afternoon in New York on Thursday, spot gold, which is more closely followed by some traders than gold futures, hovered at $1,908.

Gold’s most-active futures contract on New York’s Comex, December, settled at $1,932.50 an ounce, down just $2.60, or 0.05%, on the day.

“Gold is getting close to the August lows, but as long as Treasury yields don’t have a major move higher, the $1900 level could hold,” observed Ed Moya, analyst at online trading platform OANDA.

Treasury yields, marked by the U.S. 10-year note, hit 4.30 on Thursday, remaining below August’s multi-year high of 4.366.

(Ambar Warrick contributed to this item)