2023-09-04 09:20:00
© Archyde.com. Many factors boost gold profits at the beginning of the week!
Arabictrader.com – It achieved significant gains during the first trading this week, after the precious metal closed last week’s sessions with strong profits estimated at 1.34%; Supported by the decline of the US dollar along with the escalation of economic volatility.
Looking at today’s trading, it is clear that spot gold prices recorded an increase of about 0.19% to $1941.82 an ounce; In addition to the rise in gold futures prices – December delivery – by about 0.14%, to settle near the level of 1,969.95 points.
Below, we review the most important reasons that affected gold’s movements at the beginning of the week’s trading:
1. The decline of the US dollar
The US dollar declined clearly during today’s trading, which boosted the boom in demand for gold. In many cases, the decline in the US dollar results in an increase in the price of gold, which is denominated in the green currency. As it recorded – which measures the performance of the US currency against a number of other major currencies – a decrease of 0.14%, to reach 104.123 points.
In this regard, it can be clarified that the decline of the US dollar came as a result of the deteriorating conditions in the labor market in the United States during the month ending August, as the rate rose to 3.8% after settling at 3.5% in July; In addition to the decline in annual and monthly wage growth at the same time, which reflects the decline in inflationary pressures.
This data reinforced the markets’ expectations that the US Federal Reserve will soon end its tightening approach, and thus stop raising prices during its upcoming meetings; This caused severe damage to the dollar’s trading, and then the prices of gold contracts rose.
2. Increased economic tensions
Some economic developments contributed to the bullish momentum of gold prices in today’s trading; Moody’s, the global credit rating agency, lowered its forecast for the growth of China’s economy in 2024; Noting that some challenges are growing regarding the continued deterioration of the real estate sector, with the weak confidence of individuals and companies amid a state of political and economic uncertainty; This would fuel global economic growth fears. The Republic of China is the second largest economic power in the world.
As a result of these developments, the demand for gold increased as a safe haven during times of economic tensions and fluctuations, which eventually led to an increase in gold prices.
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