Gold prices rise as dollar weakens and investors await economic data

One sentence summary – Gold prices have increased by 0.4% to $1,921.86 per ounce, attributed to a decline in the dollar and investors seeking clarity on the strength of the economy, while investors are closely monitoring economic data and the potential for further interest rate adjustments by the Federal Reserve.

At a glance

  • Gold prices have increased by 0.4% to $1,921.86 per ounce.
  • U.S. gold futures rose by 0.6% to $1,952.
  • The rise in gold prices is attributed to a 0.1% decline in the dollar.
  • Decline in the dollar makes gold more affordable for holders of other currencies.
  • Investors are awaiting U.S. economic data and monitoring the potential for further interest rate adjustments by the Federal Reserve.

The details

Gold prices have seen a 0.4% increase, reaching $1,921.86 per ounce.

U.S. gold futures also experienced a rise, with a gain of 0.6% to $1,952.

This increase in gold prices is attributed to a 0.1% decline of the dollar against its rivals.

The decline in the dollar makes gold more affordable for holders of other currencies.

The benchmark 10-year Treasury yields have remained below recent peak levels.

Investors are currently awaiting U.S. economic data.

This data includes the personal consumption expenditures price index report and nonfarm payrolls data.

Investors are seeking further clarity on the strength of the economy.

Strong employment and wage numbers could potentially signal inflation.

This could lead the Federal Reserve to maintain high interest rates for an extended period.

Gold prices could face a decline toward $1,900 or even $1,840 if the data continues to indicate robust economic conditions.

Fed Chair Jerome Powell has mentioned the possibility of raising interest rates further to address high inflation.

Higher interest rates tend to boost bond yields.

This diminishes the appeal of non-yielding gold to investors.

Currently, investors are pricing in a 56% probability of another rate hike in 2023.

There is a 40% chance that rates will remain unchanged for the remainder of the year.

In the week ending August 22, COMEX gold speculators reduced their net long positions.

Spot silver also experienced a 0.2% increase, reaching $24.27.

This is near the highs observed on August 2.

Platinum rose by 2.1% to $963.98.

Palladium advanced by 2.8% to $1,258.88.

These factors collectively contribute to the current state of the gold market.

Investors are closely monitoring economic data.

They are also watching the potential for further interest rate adjustments by the Federal Reserve.

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cnbc.com
– Gold prices rose 0.4% to $1,921.86 per ounce and U.S. gold futures gained 0.6% to $1,952.
The dollar was down 0.1% against rivals, making gold less expensive for other currency holders.
The benchmark 10-year Treasury yields remained below recent peak levels.
– Investors are awaiting U.S. economic data, including the personal consumption expenditures price index report and nonfarm payrolls data, for more clarity on the economy’s strength.
– Strong employment and wage numbers could imply potential inflation and lead to the Federal Reserve keeping interest rates high for a prolonged period.
– Gold prices could fall towards $1,900 or even $1,840 if data remains robust.
– Fed Chair Jerome Powell stated that the Fed may need to raise interest rates further to address high inflation.
– Higher interest rates increase bond yields, making non-yielding gold less attractive.
– Investors are currently pricing in a 56% chance of another rate hike in 2023 and a 40% chance of rates remaining unchanged for the rest of the year.
– COMEX gold speculators reduced net long positions in the week ended August 22.
– Spot silver rose 0.2% to $24.27, near August 2 highs.
– Platinum rose 2.1% to $963.98, while palladium advanced 2.8% to $1,258.88.

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