Gold (XAUUSD) is one of the most attractive financial products for investors, especially in times of crisis. One of the fascinations of this asset is its high volatility and liquidity.
Our analysis will focus on the fundamental information of this commodity.
The precious metal has been a bit unstable in recent days and has stabilized above the psychological level of 2000 USD per ounce.
The instability of the safe-haven asset could be caused by different factors that investors could be taking into account in order to trade it. These variables could be macroeconomic data announced and to be announced, conflicts between certain countries in different regions, supply and demand, etc.
To begin with, the world’s leading economy, the United States, has released macroeconomic data that could influence the price movement.
Last week, retail sales for the month of December 2023 were published, for which they were very positive, 0.6% against a forecast of 0.4%. Looking ahead to this week, traders were on the lookout for Q4 2023 GDP data, which was to be announced and likewise came out very positive, 3.3% versus the forecast of 2.0%.
However, new jobless claims data was also released, 214K, and the latter came out quite negative versus last week’s 189K and the forecast of 200K. This information has kept the metal quite indecisive.
The volatility in gold could also be attributed to uncertainty regarding the Federal Reserve’s (Fed) interest rate cut in the first quarter of 2024. This concern is because the data, from the U.S. economy, continues to strengthen and leaves it up in the air as to when the agency might proceed with the rate cut.
We also need to consider geopolitical factors globally, referring specifically to military conflicts such as the clashes between the United States and the Houthi rebels in Yemen, the conflict between Russia and Ukraine, and the dispute between Israel and Palestine.
These events have had a significant impact and as a consequence are reflected in the global economy and the yellow metal. For example, when the turmoil in the Middle East began, the gold ounce reached an all-time high in the area of $2,135 USD.
Another effect that could be impacting the price of gold and keeping it above the $2,000 USD per ounce zone could be the significant high demand that the central banks of different countries are carrying, for example, in the year 2023, China has acquired more than 800 tons of gold.
To conclude, gold is an asset that is highly dependent on many fundamental factors that can affect the price and is the safe haven asset par excellence for many investors.
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