By Renita D. Young and Peter Hobson
NEW YORK/LONDON (Reuters) - Gold recovered some ground on Friday as a weakening U.S. dollar relieved pressure on prices, but the precious metal remained near 19-month lows and looked poised for its biggest weekly drop since May 2017.
U.S. gold futures
"The markets are very oversold and the dollar is overbought," said John Caruso of RJO Futures. "It looks like some of the shorts are trying to book some profits."
From a 13-month high on Wednesday against a basket of six major currencies <.DXY>, the dollar has weakened against the currencies of key gold markets, the euro zone and China, helping gold regain its footing, said ABN AMRO analyst Georgette Boele.
"I expect the dollar to peak in the coming weeks ... Gold should bottom out here," she said.
Gold has tumbled 14 percent from its April high as a rally in the greenback made dollar-priced bullion more expensive for buyers using other currencies. [FRX/] <.DXY>
Investors seeking a safe place to store assets amid trade disputes and a Turkish currency crisis have preferred the dollar to gold, undermining the reputation of bullion as a safe haven.
But news of planned U.S.-China trade talks and a partial recovery of Turkey's lira have steadied investors' nerves slightly.
Bets on lower prices on the Comex exchange continue to build and now outweigh bets on higher prices by the largest quantity ever recorded. <3088691MNET>
Pressure from speculators may ease, however, said Boele.
"Everyone who wants to be short is short, and if you are still long and have held your position all the way down, why would you sell here?"
In technicals, Fibonacci resistance was at $1,185.30 with support at the January 2017 low of $1,146.20, analysts at ScotiaMocatta said, adding that gold would likely fall further.
(Additional reporting by Apeksha Nair and Sumita Layek in Bengaluru; Editing by Bernadette Baum)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Updated Date: Aug 18, 2018 00:06 AM