Jakarta, CNBC Indonesia – World gold prices shot again, although it has not yet touched the level of US $ 2,000 / troy ounce. The lethargy of the United States dollar (US) is again driving the price of the precious metal.
On Friday (21/8/2020) at 07:15 WIB, the world gold price in the spot market rose 1.09% to 1,953.55 / troy ounce. In the last month, the price of this commodity has jumped nearly 6%.
The rise in gold prices is not out of the US dollar depressive trend. Yes, the movement of the price of gold is indeed inversely proportional to greenback.
Gold is a commodity priced in the currency of Uncle Sam’s country. When the US dollar weakens, gold becomes cheaper for investors holding other currencies. Demand also rose so that the price of gold moved north.
The US dollar has not been free from suffering. At 07:19 WIB, Dollar Index (which measures position greenback in front of six major world currencies) corrected 0.11%.
In the last month, this index fell 2.41%. To make matters worse, the correction in the past three months reached 7.18%.
Today, the weakening US dollar occurred due to investor response to the latest employment data. In the week ended August 15, the number of claims for unemployment benefits was recorded at 1.106 million. An increase compared to the previous week, namely 971,000.
The economic recovery in a superpower that is filled with uncertainty has made investors view that the US central bank (The Federal Reserve / The Fed) will still keep interest rates low. Plus, it is possible that Chairman Jerome ‘Jay’ Powell will still flush liquidity into the market.
This makes the supply of US dollars so abundant that the value is ‘cheap’. This sluggish US dollar translated into a surge in gold prices.
CNBC INDONESIA RESEARCH TEAM
(aji)
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