Gold Hits Six-week Trough As Dollar Grinds Higher

“As long as we see strength in the dollar, undoubtedly we are also going to see gold struggle,” said Saxo Bank analyst Ole Hansen, adding that the break below $1,900 sparked some nervousness and short-selling in the market.

The dollar index hit an eight-week high, dimming the appeal of bullion to holders of other currencies.

“I think gold has entered a corrective phase…A break-back above $1,900 should be difficult given how long its taken to break and hold below here,” said OANDA analyst Craig Erlam.

But even if it does, the near-term outlook isn’t good for gold with a stronger dollar weighing on the outlook and a lot of the bullish factors already priced in, he added.