Gold prices continue to rise to unprecedented levels recently, amid expectations that their upward trajectory will continue in the coming days and weeks, as a result of the anticipation of lowering interest rates in the United States and Europe, and because of the crises and wars taking place in some regions of the world.
On Friday, before the start of the weekend for financial markets, gold prices in spot transactions rose 0.4 percent to $2,168.28 per ounce by 10:57 GMT, while US gold futures contracts increased 0.5 percent to $2,175.50.
The price of gold reached an unprecedented level of $2,170.99 earlier the same day, and rose by more than 4.1 percent, on its way to recording the largest weekly percentage increase since mid-October.
In a phone call with the Al-Hurra website, the Jordanian expert and economic analyst, Amer Al-Shoubaki, explained that “the rise in geopolitical tensions and the increasing risks resulting from the war on Ukraine or the war in the Middle East are pushing investors to resort to safe commodities such as gold.”
Buying and selling gold…a haven for Egyptians to “stay in the safety zone”
In the past two years since it passed, speculators buying gold have descended on the market, as the collapse of the Egyptian currency has increased demand for gold as a safe haven from turmoil, according to a New York Times report.
He continued: “There are also expectations of a reduction in interest rates by the US Federal Reserve and the European Central Bank, and therefore this will make the dollar unattractive as a safe haven, which will make people favor gold.”
The Lebanese academic and economic analyst, Zeina Mansour, agreed with what was mentioned above, explaining to Al-Hurra website, “The crises that the Middle East and North Africa region is going through have made people in those countries accept gold recently, for fear of the decline in local currency prices, In addition to expectations of lower interest rates in the United States.
As for Michael Widmer, head of the metals research department at Bank of America, he previously told Reuters: “I think that the great demand that (the gold market witnessed)… was purely speculative.”
Gold traders’ focus was on the US non-farm payrolls data released on Friday, which will guide the market in the near term.
The US Department of Labor’s Bureau of Labor Statistics said Friday, in its closely watched jobs report, that nonfarm payrolls increased by 275,000 jobs last month.
About 100 tons in a year… An Arab country becomes the first importer of Russian gold
Russia has become the largest exporter of gold to the United Arab Emirates since Western sanctions were imposed on Moscow’s exports following the invasion of Ukraine, according to Bloomberg.
January data was revised downwards, to show the addition of 229,000 jobs instead of the 353,000 previously reported.
In this regard, economist Ricardo Evangelista told Agence France-Presse earlier, “Concerns surrounding the global economic outlook, geopolitical tensions, and shifting expectations toward early cuts in interest rates fueled increased demand for the precious metal, which led to its upward price trajectory.”
He continued: “Among these factors, US interest rates stand out as a major risk factor affecting gold prices, with the potential upward trend restricted due to the uncertainty surrounding the Federal Reserve’s plans to dismantle its restrictive monetary policy.”
For his part, Al-Shoubaki expected the price of an ounce of gold to exceed $2,200, adding: “Regardless of daily speculation, the price may, according to experts, reach a ceiling of $3,000, depending on the value of the interest rate cut from the US Federal Reserve, which is expected.” It should be 125 basis points.
He continued: “Some experts expect central banks to increase their share of gold due to the decline in the price of the dollar.”
He concluded by saying: “If central banks and investment portfolios in many countries of the world decide to increase their share of gold, this will certainly be reflected in the price of the dollar, and make the yellow metal more attractive to dealers.”
2024-03-10 13:31:28
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