Gold Prices Fall as Federal Reserve Chairman’s Speech Impacts Market
In the Egyptian market, the price of gold has reached a new level. According to the latest update, a gram of 21 karat gold is now priced at 2220 pounds, without any industrial addition. This comes as demand for gold remains calm in Egypt.
The global price of gold has also been affected by recent events. Gold prices fell yesterday, nearing their lowest levels in three months. The decline can be attributed to Federal Reserve Chairman Jerome Powell’s speech before Congress, where he discussed the possibility of raising interest rates. As a result, gold prices have fallen for four consecutive sessions and have reached critical price areas.
Currently, spot gold prices are trading at $1926 an ounce, after declining by 0.3%. Yesterday, it hit a three-month low at $1919 an ounce. Gold prices are attempting to break the support level at $1930 an ounce, but so far, they have failed to find any support to reverse their downward movement.
Powell’s testimony before Congress has had a significant impact on the markets. He indicated that raising interest rates twice during the second half of the year is a good guess by the markets. This has led to the belief that interest rates will remain high for the remainder of the year. The markets have also priced in a 72% probability of a 25 basis points interest rate increase during the next July meeting.
The impact of Powell’s speech on interest rates has been negative. Raising interest rates increases the opportunity cost of holding gold, as it does not provide a return compared to bonds. The dollar has also been affected by Powell’s statements, trading near its lowest level in a month.
The markets are now waiting for the second part of Powell’s testimony before Congress, as well as the weekly unemployment claims data on the US economy. The Federal Reserve relies heavily on employment sector data to make decisions on interest rates.
Yields on US government bonds have continued to trade near high levels, adding to the negative pressure on gold prices. The yield on the 10-year bonds is currently at 3.752%, while the yield on the two-year bonds, which are most affected by changes in interest rates, is at 4.741%.
Overall, gold prices have been impacted by Powell’s speech and the market’s anticipation of future interest rate increases. Investors will be closely watching for any further developments that may affect the price of gold.Gold prices in Egypt continue to remain stable, with the price of 21 karat gold reaching 2220 pounds per gram. This comes as demand for gold remains calm in the country.
The global price of gold, however, has been experiencing a decline. Yesterday, gold prices fell near their lowest levels in three months due to the negative impact of Federal Reserve Chairman Jerome Powell’s speech about raising interest rates. Gold prices have fallen for four consecutive sessions and have reached critical price areas.
At the time of writing this report, spot gold prices are trading at $1926 an ounce, after declining by 0.3%. Yesterday, it hit a three-month low at $1919 an ounce. Gold prices are currently attempting to break the support level at $1930 an ounce, but have failed to find any support to reverse its downward movement.
Powell’s testimony before Congress was the main driver of the markets. He indicated that raising interest rates twice during the second half of the year is a good guess by the markets, and that the pace of interest hikes no longer matters now that interest has reached its current levels. This has had a negative impact on gold prices, as raising interest increases the opportunity cost of holding gold compared to bonds.
The markets are now pricing in a 72% probability that the Federal Reserve will raise interest rates by 25 basis points during the next July meeting. However, there is a belief that the Bank may not resort to raising interest rates again after the July meeting.
Today, the markets are waiting for the second part of Powell’s testimony before Congress, as well as the weekly unemployment claims data on the US economy. The Federal Reserve relies heavily on employment sector data in making its decisions on interest rates.
The dollar did not witness much support in the markets following Powell’s testimony. In fact, it declined to trade near its lowest level in a month. The dollar index, which measures its performance against a basket of six major currencies, witnessed weak movements during today’s session.
Yields on US government bonds continued to trade near high levels after Powell’s talk about the future of interest rates, which caused increased negative pressure on gold prices. The yield on the 10-year bonds increased by 0.8%, while the yield on the two-year bonds, which are most affected by changes in interest rates, increased by 0.7%.
Overall, gold prices in Egypt remain stable, but the global price of gold is experiencing a decline due to the impact of Powell’s statements on raising interest rates. The markets are closely watching Powell’s testimony and the US employment sector data for further insights into the future of gold prices.
How are high yields on US government bonds influencing the downward pressure on gold prices
Recent statement before Congress about the possibility of raising interest rates has had a significant impact on the markets. Powell’s testimony indicates that the markets’ expectation of two interest rate hikes in the second half of the year is accurate. This has led to the belief that interest rates will remain high for the rest of the year. The markets have also priced in a 72% chance of a 25 basis points interest rate increase in the upcoming July meeting.
This statement has negatively affected gold prices, as raising interest rates increases the opportunity cost of holding gold since it does not provide a return like bonds do. Additionally, the value of the dollar has also been affected by Powell’s remarks, trading near its lowest level in a month.
Investors are now waiting for the second part of Powell’s testimony and the weekly unemployment claims data on the US economy. The Federal Reserve heavily relies on employment sector data to make decisions on interest rates.
The high yields on US government bonds have also contributed to the downward pressure on gold prices. The yield on the 10-year bonds is currently at 3.752%, while the yield on the two-year bonds, which are most affected by interest rate changes, is at 4.741%.
Investors will continue to closely monitor further developments that may impact the price of gold, as it remains vulnerable to shifts in interest rates and market sentiment.
It seems like Jerome Powell’s testimony before Congress has sent shockwaves through the gold market, causing prices to plummet. Investors should closely monitor the impact of his statements on global economic policies.