There are various factors that affect the price of gold in the near term. The first aspect is the stronger value of the US dollar, which is presently at its highest position in two decades.
The spot gold price finished at $1694.79 on Friday, slowly rising from its slump in the last weeks of September. The 52-week high for gold is $2,070.13, while the 52-week low is $1,615.05. This week's gold prices were influenced by a variety of variables. Let us clarify these variables and help you comprehend the full picture of gold.
There are various factors that affect the price of gold in the near term. The first aspect is the stronger value of the US dollar, which is presently at its highest position in two decades. A stronger dollar tends to keep gold prices lower and under control, but a weaker currency can drive gold prices higher. Second, rising interest rates, coupled with the value of the US dollar, are posing challenges to gold, with rising yields making bonds more appealing to many retail investors than gold.
According to the most recent US job market report, 263,000 jobs were created, which is slightly more than analysts predicted, and the unemployment rate was reduced by 3.5%. This definitely did not indicate a slowing economy in the United States, and as a result, the gold market suffered a minor drop at the start of the week.
Markets anticipate another hike in the Fed's rate before it pauses and pivots to the lower side. According to the CME FedWatch Tool, markets are putting in a 78% possibility of another 75-basis-point raise at the November meeting. Analysts warn that this might have a short-term impact on gold's surge.
Geopolitical pressures, like the war in Ukraine, the looming nuclear threat, and the oil crisis, are some macroeconomic forces supporting gold. Furthermore, the seasonal dynamic is favouring gold due to the holiday and wedding season in India, and there is a spike in gold imports from countries such as China and Turkey.
According to some analysts, gold will be strongly supported by excellentfundamentals and will show a positive high in the near future. Despite thevolatility of the markets, long-term investors remain optimistic about thecoming months.
Written By: Thegoldstocks.com
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