This week, gold prices were influenced by the dollar exchange rate, the situation in North Korea and volatility on the Comex exchange. What exactly happened in the market and how did the gold prices react?
On Tuesday 4th, the dollar depreciated against the backdrop of geopolitical instability. The US currency has fallen by 7% since the beginning of 2017, which encouraged the price of gold to rise up to $1,223.
On Wednesday 5th, gold futures affected by the situation in North Korea touched $1,226. The rise in the COMEX exchange amounted to 0.55%.
Gold prices were adjusted after a tough statement by UN Ambassador Nikki Haley about the need for military actions to counter North Korea's threats. In her opinion, Pyongyang is blocking all opportunities for a diplomatic solution for the crisis on the Korean peninsula.
On Thursday 6th, gold prices fell by 0.29%, reaching $1,223. This small decline was affected by the employment data from the US, the lack of certainty in the Fed’s monetary policy and the pressure on the oil market.
On Friday 7th, the price of gold stopped at $1,212. However, Robin Tsui, specialist at State Street Global Advisors, spoke about the upcoming rise in gold prices and the dependence of precious metals on Trump's policy:
"This should be the key to the formation of gold prices. Even with an increase in the Fed’s interest rates, the demand for gold will be high given the real rates remain relatively low"
On Monday 10th, gold prices reached $1,209 per ounce. The future forecasts are affected by the unemployment growth by 4.4%. Bob Haberkorn from RJO Futures believes that "bears control the situation in the gold market; in order to push prices up, a good reason is required"
It should be noted that the whole past week was negative for the British pound: the pound / dollar rate has decreased by almost 100 points, which has significantly affected the international market.
A number of UBS specialists keep abreast of the dynamics and expect swift changes: "There is a risk of slowing growth of the global economy. Safe-haven qualities of gold currently look more than attractive"
Fed officials Janet Yellen, Stanley Fisher and William Dudley pointed positive changes in the US economy as an excuse for politic consolidation. The market conditions can be significantly influenced by these changes.
Keep an eye on the gold market and protect your capital!