Gold maintains choppy performance despite dollar’s losses

Gold maintains choppy performance despite US dollar’s losses Given that the market’s expectations for future US interest rate increases have been greatly reduced, the recent decline in gold prices is likely to have come to an end.


Even so, we anticipate some additional upside potential for the year’s conclusion. Because it should be obvious by that point at the latest that the US rate hiking cycle is over.

As the dollar and Treasury yields fell on Thursday amid hopes that the Fed will soon stop raising interest rates, the price of gold is clinging to one-month highs.

After reaching its highest level since June 16, spot gold was up 0.1% at $1,958.16 per ounce by 11:50 a.m. EDT (1550 GMT). Futures for U.S. gold increased 0.2% to $1,964.60. The benchmark US Treasury yields hit a 10-day low, lowering the opportunity cost of keeping non-yielding metal, while the dollar index dropped to its lowest level in more than a year, making gold more accessible to foreign purchasers.

After the release of the CPI figures, the gold market had a significant rise. If it can find another stimulus to push up to the $2,000 level, gold has a strong chance, but we are eating through a number of different resistance areas.

Data released on Thursday revealed that US producer prices hardly increased in June, adding to the mounting evidence that the economy has entered a period of deflation. This information was released the day after figures revealed that US consumer prices increased little in June, marking the smallest yearly gain in more than two years.

The market’s anticipation of a second raise has decreased. The price of gold has risen in step with this adjustment. The Federal Open Market Committee (FOMC) is expected to raise rates again later this month, according to interest rate futures, but prospects of more hikes have decreased.

The opportunity cost of storing non-yielding precious metals rises as interest rates rise. In the meantime, unexpectedly fewer Americans than expected last week filed new applications for unemployment benefits, suggesting that the labour market was still tight.

Platinum increased by 2.9% to $973.95, palladium remained unchanged at $1,282.81, while spot silver increased by 2.3% to $24.68 per ounce.

It is interesting that during the late Asian session, the gold price encountered tenuous barriers when seeking to overcome the immediate resistance of $1,960.00. The precious metal is anticipated to restart its upward trend since U.S. inflationary pressures have significantly decreased and are now low enough to persuade the Fed to raise interest rates only once by year’s end.