Gold is falling today, so will it give up its weekly gains? by Arab Trader

© Reuters. Gold is falling today, so will it give up its weekly gains?

Arabictrader.com – Prices fell gold marginally during Friday’s trading, and continued to trade above the $1,800 level as the week’s trading approached its end, after the yellow metal rose strongly during the week to its highest level in nearly four months, which put it on the way towards its largest weekly profit in 3 weeks.

Today’s trading showed a marginal decline compared to the previous session’s dealings, as spot gold contracts recorded a slight decrease, equivalent to 0.09%, to reach $1801 an ounce, and gold futures contracts decreased by about 0.01%, to reach $1815 an ounce.

Reasons for the marginal decline in gold prices

The American dollar rose slightly, reaching 0.32%, to record 104.40 points, which limited gold’s gains to some extent during the morning trading, as the rise in the US dollar index leads to a decline in the cost of gold priced in dollars for investors holding other currencies, which ultimately reduces the demand for gold.

The decline in gold profits can be attributed, albeit in a small way, to two things, one of which is the statements of John Williams, which mainly touched on the fact that inflation has not yet reached its peak level, referring to the possibility of a rise in price levels in the country; Which calls for the US Federal Reserve to adopt a more stringent monetary policy. Which would lead to the rise of the dollar index, ending with a decline.

The second issue is US President Joe Biden’s willingness to talk to his Russian counterpart, Vladimir Putin, during press statements yesterday, Thursday, in reference to the possibility of reaching talks on ending the Russian-Ukrainian war.

As the calming of political tensions contributes to lowering gold prices, the demand for the yellow metal is increasing dramatically in light of the political tensions, as it is a safe haven for investors in times of crisis.

However, the dollar’s rise is still limited, given several factors, the most important of which are the statements of US Federal Reserve Governor Jerome Powell last Wednesday, which stated that the time has come to consider changing the pace of raising interest rates in conjunction with the inflation rate approaching the required level.

This reinforced the rising expectations of the markets regarding the US Federal Reserve’s intention to raise interest rates at a slower pace by 50 basis points only at its next meeting, after the US Federal Reserve tightened monetary policy by 75 basis points over the past four meetings.

In this regard, analysts at CME Group stated that gold metal has exceeded the level of $1,800 an ounce during today’s trading, amid a significant increase in the volume of demand for gold, which is an indication that gold can achieve more profits in the very near term.

With regard to the prices of other metals except gold; Contracts recorded a growth of 0.42%, equivalent to about $23 an ounce, while they decreased by about 0.53%, and platinum metal contracts also declined, to record about $1053 an ounce.

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