Jakarta, CNBC Indonesia – The price of gold is still very moving volatile. After a free fall, the price of gold jumped again yesterday.
At the close of trading on Thursday (30/3/2023), gold closed at US$ 1,980.25 per troy ounce. The price of the precious metal jumped 0.83%.
This price is the highest since March 23 or last week. Yesterday’s strengthening was also inversely proportional to the close of the previous trade where gold fell 0.48%.
The price of gold weakened this morning. In today’s trading, Friday (31/3/2023) at 06:10 WIB, the gold price was at US$ 1,979.33 per troy ounce. The price is sloping 0.05%.
The strengthening of gold was supported by the collapse of the United States (US) dollar and action short covering.
The US dollar weakened as markets expect the US central bank The Federal Reserve (The Fed) to start dovish.
Moreover, the latest US employment data shows the labor market is starting to cool off. US jobless claims in the week ending March 25 2023 totaled 198,000. This number increased by 7,000 compared to the previous week.
Jobless claims were also higher than expectations at 195,000.
The dollar index closed at 102.14 yesterday, far below the previous day’s position of 102.64. A weaker dollar will benefit gold because gold prices are becoming more affordable for investment.
“This increase is sustained rally short covering. The cause is expectations that the Fed will soften,” said TD Securities analyst Bart Melek, quoted from Reuters.
CME FedWatch survey shows the market is now betting 50-50% if the Fed will keep interest rates at its next meeting in May.
Market participants themselves are waiting for the data TheCore Personal Consumption Expenditure(PCE) Price Index or personal consumption of US citizens which will be out Friday night.
The market expects the index to rise 0.2% (month to month/mtm) in February 2023 after jumping 0.6% in January.
“The below-expected PCE data will reassure the market that Fed tightening may just take a little more time (before easing),” Melek said.
Boston Fed President Susan Collins has previously hinted that the Fed may only raise interest rates one more time.
On the other hand, another official, namely Thomas Barkin, sees that inflation is still too high so that the hike could take longer.
With that fact, Commerzbank said gold is still prone to weakening.
“We estimate gold will fall into the range of US$ 1,900-1.80 per troy ounce in the next few months,” Commerzbank wrote, quoted from Reuters.
CNBC INDONESIA RESEARCH
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