Home Business News The price of gold touches $2,008, will the rise continue?

The price of gold touches $2,008, will the rise continue?

22nd Nov 23 11:29 am

The price of gold has risen to touch levels above $2000 per ounce at the end of yesterday’s trading, starting today’s trading near $1998, supported by investors’ expectations that the Federal Reserve has ended its series of interest rate hikes, putting pressure on the US dollar and bond yields in a clear negative manner.

As a result, the spot price of gold rose by 1.2% to $2008 per ounce, approaching its highest levels in a month. US futures contracts for gold also rose by 1.2% to trade at $2010 per ounce.

This coincided with the decline of the US dollar index to its lowest level in over two months, making the price of gold cheaper for other currency traders. At present, the yields of US 10-year Treasury bonds are fluctuating near their lowest levels in two months.

It seems to me that this price movement is related to covering uncovered positions due to the weakness of the US dollar and the market’s pricing of the fact that there will be no further interest rate hikes in the future.

Therefore, the price of gold seems to be at its peak strength. However, I do not think that the current time is considered ideal for buying due to the price approaching overbought levels in the medium and long term.

After investors received the minutes of the Federal Reserve meeting yesterday, I believe that the situation has become clearer regarding the future path of the central bank’s interest rate. Especially since the markets insist on pricing in a halt to future interest rate hikes, which supports the temporary upward trend of gold in the short term.

There was no temporary halt to interest rate hikes as we have recently become accustomed to from the Fed, and this is likely what caused the rise in the price of gold and its touching of levels above $2000 at the end of yesterday’s trading. However, what is noteworthy here is that the price was unable to sustain above these levels and quickly dropped back to levels of $1998 and slightly lower.

From my point of view, at present, and after the easing of uncertainty and concerns about the conflict in the Middle East and geopolitical conditions around the world, expectations for US interest rates have regained control over the movements of gold prices. It can be said that the markets are trying to return to stability and ideal pricing for global events, news, and data.

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