(Kitco News) – The gold market is starting a new trading week on the back foot as the U.S. dollar continues to find new buyers.
December gold futures last traded at $1,942 an ounce, down 0.26% on the day. Meanwhile, the U.S. dollar index last traded at 93.15, roughly unchanged on the day.
Gold’s selling pressure comes after it was unable to hold $2,000 an ounce last week.
According to some analysts, after an historic drive since the start of the year, gold has entered into a necessary consolidation period. Analysts have said that they see this as a healthy correction that will help gold maintain its long-term uptrend.
In a recent interview with Kitco News, Ole Hansen, head of commodity strategy at Saxo Bank, said that new momentum in the U.S. dollar could be gold’s most significant headwind in the near-term.
Last week speculative bearish interest in the U.S. dollar fell slightly after hitting its highest level in nine years. Hansen said that this trend probably has more room to unwind.
“We are seeing dollar short positioning at extreme levels and these positions right now are squeezable,” he said. “That makes bullish gold position squeezable in the near-term,” he said.
While gold looks vulnerable to lower prices in the short-term, many investors wonder just how low