The price of gold fell to 1.5% on Tuesday, ending a series of long sessions of 5 sessions. The dollar strengthened, and the company’s substantial profits boosted the appetite for more risky assets.
Spot gold fell 0.9% to $1,790.54 an ounce at 13:46. US gold futures for December delivery were down $1,73.40 and fell 0.7%. RJO Futures senior market strategist Bob Haberkorn explains that the stock is moving stronger than expected, with many gains on the deck, with a bit of gold missing this morning.
During the session, the strong results of technology companies brought the S&P 500 Index to a record high, thus depriving it of brilliance from safe-haven gold. This reduces the bullion appeal to investors who own other currencies. The dollar index rose 0.1%.
According to Haberkorn, some gold traders may book a profit from the last uptrend because the stocks are as strong as they are. The price of gold has risen 2.5% in the previous five sessions. It was fueled by inflation concerns and uncertainty about what measures central banks would take to combat rising prices.
Analysts forecast that gold is unlikely to move too far from the key technical level of $1,800 an ounce, given the current picture of inflation. Gold is a hedge against high inflation, which broad money printing by central banks largely follows.
This week’s primary focus will be on central bank meetings, including the Bank of Japan and the European Central Bank meetings, scheduled for Thursday. The U.S. Federal Reserve policy meeting is scheduled for next week.
According to OANDA analyst Craig Erlam, from a technical point of view, a move below $1,780 for gold, which has been on an upward trend throughout the month, looks very bad. Silver was up $24.01 an ounce, down 2.2%. Platinum fell 2.6% to $1,029.65 an ounce. Palladium also fell to $1995.91, up 2.7%.
According to a Commerzbank analyst, markets are appreciating higher inflation. Many participants believe that the current high level of inflation is not temporary and that gold should benefit from it. Revenue from benchmark 10-year notes and the U.S. dollar has risen sharply, hampering the attractiveness of the precious metal.
Gold is a hedge of inflation. However, reduced incentives and higher interest rates lead to government bond yields turning into higher optional values.
We wonder if gold will regain the upward dynamics and what will happen to the inflation rate.