General

The talk of interest drops the price of gold.. So what did you do with the dollar?

Economie

The talk of interest drops the price of gold.. So what did you do with the dollar?

Global gold prices are witnessing a state of cautious anticipation for the US Federal Reserve’s move in the coming days regarding a new rate hike, driven by strong data.

Gold prices calmed today, Tuesday, affected by the stability of the dollar, after recording its largest jump in two weeks in the previous session, amid fears of a greater increase in US interest by the Federal Reserve (US Central Bank).

The global gold price stabilized during spot transactions at $1769.99 an ounce, and US gold futures contracts remained unchanged at $1781.20 an ounce.

Gold fell after hitting a 5-month high, closing 1.6% lower as the dollar recovered after data fueled speculation that the US central bank may raise interest rates more recently than expected.

Interest steals the luster of gold

High interest rates affect the attractiveness of gold, as they raise the opportunity cost of owning the precious metal that does not pay interest.

Reuters technical analyst Wang Tao said that gold may jump in spot transactions to $ 1783 an ounce, before continuing its decline towards $ 1766 an ounce.

As for other precious metals, spot silver rose 0.5% to $22.37 an ounce. Platinum rose 0.1% to $998.63 an ounce. Palladium rose 0.5% to $1,885.75 an ounce.

The dollar is holding on to the support of US jobs

The dollar index held firm today, Tuesday, after achieving its biggest gain in two weeks, after strong data for the services sector in the United States fueled expectations that the Federal Reserve (the US central bank) would raise interest rates more than recently expected.

The Australian dollar rose from near its lowest level in a week, after the Reserve Bank of Australia (the central bank) raised interest rates for the eighth month in a row.

The dollar index, which measures the performance of the US currency against six major currencies, settled at 105.24, after rising 0.7% on Monday, achieving its biggest gain since November 21.

It had fallen to 104.1 yesterday for the first time since June 28, before changing direction following data showing an unexpected rebound in the US services sector in November as well as strong jobs data.

“The longer the strength of the US economy continues, the greater the doubts maybe about whether the US will really suffer a recession next year and whether the US central bank will actually cut key interest rates at this point,” said Yona Pak Heger, currency analyst at Commerzbank.

The Federal Open Market Committee will issue its decision on monetary policy on December 15th. Dealers now expect a half-point increase in rates to a range of 4.25-4.5% and that the US central bank will stop raising rates at just above 5% in May.

The Australian dollar rose 0.3% to $0.6718, recouping some of its 1.4% losses yesterday, after the Australian central bank said it had no predetermined path to tighten monetary policy, but inflation was still high.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button