Investing.com – Updated at 12:14 GMT
Gold prices rose strongly, surpassing levels of $2,000 an ounce, to record $2,011 an ounce in spot contracts, and futures contracts recorded $2,0034 an ounce.
The rally came after weaker-than-expected labor market data, which fell to a 21-month low, warning that the Fed may lead the US economy into recession as the unemployment rate rises.
Yields, which are inversely proportional to gold, fell, dropping two-year Treasury bonds below the 4% level.
Gold is falling in hopes of a recession in the US economy.
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Updated at 13:34 GMT
Gold prices rose again today, with gold futures rising above $2,005 an ounce, while spot contracts recorded $1,989 an ounce.
This comes as the US dollar index fell to its lowest level in two weeks below the 102 level, after yesterday’s manufacturing data that warned that the economy may be heading into a recession.
In statements from Jamie Dimon, President of GB Bank (EGX: AUTO) Morgan, he said that the banking crisis is not over yet, and there will be repercussions that will continue for years to come.
That is why risk appetite left the markets today with the decline in the main US indices.
The most important technical levels for the price of gold in spot contracts:
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Gold prices fell today, Tuesday, despite the decline in the dollar index as well, in a scene that does not happen often in the markets, as investors evaluate the possible course of monetary policy after data yesterday showed a significant decline in US manufacturing activity and OPEC + production cuts raised inflationary risks.
OPEC surprised the markets on Sunday with voluntary cuts in oil production, which caused huge increases in crude prices, as this decision portends the return of inflationary pressures again and threatens the failure of the tightening monetary policy paths that central banks have pursued in the recent period.
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Gold and the dollar now
It fell by 0.3% at 1979 dollars an ounce.
And US gold futures fell 0.25% to 1996 dollars.
While it decreased by 0.1%, to score 101.7 points.
gold when settling yesterday
Gold prices rose to the highest level in more than a year when dealings settled, yesterday, Monday, with concerns about accelerating inflation after the “OPEC Plus” decision to reduce oil production.
Upon settlement, June delivery rose 0.7%, or $14.20, to $2,000.40 an ounce.
Investors nervous
“We are constantly bombarded with major events and this keeps investors on edge,” said Edward Moya, senior market analyst at OANDA, referring to the global banking turmoil that pushed gold up 8 percent last month.
“Gold is rising after OPEC+ provided another shock to the global financial outlook,” Moya said.
Moya indicated that for the third week in a row, gold began the trading week with a significant development, as the past two weeks were dominated by banking failures in Silicon Valley in California and Credit Suisse in Zurich, before this week’s production cuts by OPEC + raised new concerns about inflation.
“The rally will be worrying for central bankers as they try to navigate the end of their tightening cycles,” Moya added.
While Christopher Wong, a strategic analyst at OCBC FX, said: “Gold may witness a uniform price movement in the near term in the absence of a new catalyst, in conjunction with monitoring the markets for the extent of oil price gains because this may affect inflation expectations and complicate monetary policy decisions.”
Markets see a 58.7% chance of a quarter-point hike in the Fed’s rates in May. But the possibility of a rate cut later this year has also risen.
Yesterday’s data revealed that the American Supply Institute’s manufacturing purchasing managers’ index fell in January to its lowest level in nearly three years.
“In the short term, the second quarter, we expect gold to derive more support from a scenario in which both inflation and interest rates may peak,” Edward Meir, metals analyst at Marex, said in a note.
He added, “If our expectations are correct, then this is expected to lead to a decline in the dollar and pave the way for a larger upward movement in gold.”
blurry growth
US Treasury Secretary Janet Yellen said, yesterday, Monday, that OPEC +’s sudden decision to cut oil production is an “unconstructive act” that would exacerbate uncertainty regarding global growth prospects and also burden consumers in light of rising inflation.
Yellen told reporters: “I think it’s an unfortunate measure that OPEC decided to take. I’m not sure yet about the impact on prices. I think we need to wait a little longer to assess the matter realistically.”
Yellen said lowering gasoline prices from last year’s highs helped curb inflation, and it would be harmful if the trend reversed.
Yesterday, Monday, US President Joe Biden commented on OPEC’s decision and said: “The oil production cut announced by OPEC + at the beginning of the week will not be as bad as you think.”
