© Reuters.
Investing.com – (Update at 20:20 Riyadh time)
Gold continues to decline in the middle of the American session, as gold futures contracts lose 0.32% of their value, to record 1969.75 dollars an ounce, while gold prices (spot) fall by 0.40%, to 1935.3 dollars an ounce.
This decline comes mainly due to federal signals that the Fed will continue to raise interest rates for the remainder of 2023. Some analysts are convinced that the expected consumer price index data this week will come quickly (higher than expected and past), which may motivate the Fed and its president to continue the process of monetary tightening. .
gold this morning
Gold opened its weekly trading with a downward movement, with the Asian market opening today, Monday, down by 0.31% for spot contracts and 0.21% for futures contracts. Gold is waiting for many economic data this week.
The reason why gold is falling now
Futures now records $ 1971.65 an ounce, while it records $ 1936.88 an ounce. This decline comes days before the release of the expected US inflation data. This decline comes with a relative rebound in yields, as yields on 10-year Treasury bonds are now rising by 0.42% to 4.229%. Likewise, yields on two-year Treasury bonds increased by 0.66% to 4.823%.
The American rose by 0.23% against a basket of foreign currencies, the most important of which was the decline of 0.26% against the dollar, and the pound, which fell by 0.20% against the dollar, and rose by 0.35%. It is noteworthy that the Japanese Central Bank issued a summary of the views of its members hours ago, in which opinions varied between continuing monetary support or raising interest, but the yen fell after the data was issued.
Baumann turns the tables
In important statements, Baumann said that there are no signs of a strong restriction resulting from the banking crisis in March, which necessitates continuing to raise interest rates in the upcoming meetings until we are assured that inflation is declining strongly.
Bauman confirmed his conviction of the need for more hikes in the upcoming Fed meetings. Regarding the recent positive data, Baumann said that more needs to be verified.
Regarding the labor market data, Bauman saw that the demand for labor is more than the supply, which puts upward pressure on prices.
Gold last week…waiting for the Fed
Gold rose last Friday at the close, with the release of weaker-than-expected employment data, paving the way for the Federal Reserve to stop raising interest rates again, which was supported by the statements of Fed members Raphael Bostick and Austin Goolsby. However, this rise did not erase gold’s weekly losses, which amounted to 1% last week.
The most important thing awaits gold now
Metals markets are now squarely focused on US inflation data due on Thursday, to get more clues about the world’s largest economy.
Inflation is expected to pick up again after the sharp decline in June – a scenario that could drive expectations of a rate hike by the Federal Reserve. Gold is expected to decline further on a strong inflation reading, while the dollar is poised to rally.
The prospect of higher interest rates in the US has weighed heavily on the yellow metal in recent weeks, with traders favoring the dollar even after Fitch downgraded the US sovereign rating.
The downgrade by Fitch also led to sharp increases in US Treasury yields, putting pressure on non-yielding assets such as gold.
Other precious metals were somewhat mixed on Monday, but they also took heavy losses from last week. It increased by 0.4%, while it decreased by 0.2%.
Copper is motionless ahead of more China signals
Copper prices fell slightly on Monday, with focus shifting to several Chinese economic indicators coming this week.
It fell 0.1% to $3.8500 a pound.
The world’s largest copper importer is due to be released later this week, with both readings set to provide more signs of a slowing economic recovery in the country.
While Chinese copper imports have remained flat this year, deteriorating economic conditions in the country have heightened concerns about an eventual decline in demand. Data released last week also showed that the economy had a weak start to the third quarter.
Technical analysis of gold
2023-08-07 17:25:00
#Urgent #gold #continues #fall #dollars #reason #Powered #Investing.com
