Gold prices have had an ascending performance over the past week. Despite weaker figures in the gold market, experts remain optimistic: there are several reasons why they think gold prices will rally soon.
All details below.
Gold prices went down to $1,247 per ounce on Tuesday 20th, just as the world's stock markets went up to near all-time record highs. David Govett, London bullion broker, disclosed other factors that caused weaker gold prices that day:
“This coincided with yet another rate rise from the Fed and this – combined with abnormal silence from Trump and general peace and quiet in the world – has contributed to gold’s pullback.”
On Wednesday 21st, gold prices remained unchanged at $1,247 per ounce, however, the market was not quiet at all: commodities rallied, and the main currencies, namely the British pound and the euro, increased their value against the dollar – their highest level since last November. “A sign of the economy itself having begun to normalize,” said the chief economist of the Bank of England Andrew Haldane.
That sign was not very long-lasting since the next day, June 22nd, already presented higher gold prices ($1,254 per ounce) as investors sought financial protection. The world's stock markets kept on decreasing, pulled down by oil and energy shares. And in the United States, the major government bond prices rose, pushing US Treasury yields down to their lowest since last November too.
Gold prices kept on rising on Friday 23rd due to European stock markets dropping again. But the price of gold didn't only rise in terms of US dollar, at $1,258 per ounce, but also in Sterling pound, Chinese yuan, and Indian rupee – its highest in a whole month.
After the weekend, the gold market changed little on Monday 26th: an ounce of gold was priced at $1,256. Markets waited for fresh US economic data, and a weaker dollar was providing some support. ANZ's analyst Daniel Hynes forecasted good levels for gold prices:
“The market is looking at this week with caution… There’s certainly some expectations of disappointing data and also a more dovish Fed, that could keep gold prices elevated.”
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