Gold Declines Despite Dollar Weakness…and Awaits Important Data By Investing.com

Gold Declines Despite Dollar Weakness…and Awaits Important Data By Investing.com
Gold Declines Despite Dollar Weakness…and Awaits Important Data By Investing.com
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© Reuters.

Investing.com – The yellow metal fell in early trading on Wednesday, despite the weakness and suffering in the US, in light of the waning support it receives from the US Federal Reserve regarding raising interest rates..

However, despite the limited declines in gold, eyes are still focusing on the important resistance levels at $1950 an ounce, as gold hovers near the highest level in 9 months, while the dollar is trading at its lowest level since last April..

Prices of the yellow metal are still unable to exceed levels of $1950 an ounce, pending further signs of a slowdown in the pace of tightening by the US Federal Reserve..

Meanwhile, it moved in a tight range on Wednesday as investors shied away from taking big bets ahead of US economic data this week..

This comes while expectations that the Federal Reserve (the US central bank) will slow the pace of raising interest rates kept the yellow metal attractive.

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gold now

The yellow metal fell during these moments of trading today, Wednesday, in the range of $ 4, so that futures contracts for the yellow metal decreased 0.2% an ounce, down to levels near $ 1930 an ounce..

On the other hand, it backed off Spot gold contracts, US dollars, at a greater pace, recording losses in the range of $ 6, or the equivalent of 0.3%, down to levels near $ 1931 an ounce..

dollar now

On the other hand, the US dollar index fell during these moments of trading today, Wednesday, below the levels of 102 points, to levels of 101.8 points, with a decline of about 0.15% against a basket of major currencies..

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On the other hand, the yield increased slightly before the release of the GDP data tomorrow, Thursday, and the yield on 10-year bonds increased by 0.004 points to 3.46 levels.%.

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What happened

Gold prices rose nearly $7 for the fourth consecutive session at the close of trading on Tuesday, and it is likely that the path of the precious metal in the near term will depend on US economic data that may affect the interest rate strategy of the Federal Reserve..

The price of gold futures contracts rose yesterday, Tuesday, by 0.4%, equivalent to $ 6.80, to reach $ 1935.40 an ounce, and the spot delivery price rose by 0.2%, to record $ 1935.28 an ounce..

Price orientation

Matt Simpson, senior market analyst at City Index, said: “Any signs of weakness in the US economy will be taken as one reason to push the Federal Reserve to take a less aggressive approach, and this may support gold prices, which will also take in safe-haven flows.”“.

“The disappointing numbers are likely to help gold climb above $1,960, but it may not breach $2,000 on its first attempt, given the importance of the number,” added senior market analyst at City Index.“.

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Important data

The market’s focus is now on US fourth-quarter GDP data due on Thursday, which could set the pace for rate hikes during the Fed’s January 31-February 1 policy meeting..

And if there are signs that the US economy is slowing down and the central bank will soon slow down its monetary tightening and lower interest rates, gold could rally..

Interest pricing

Most investors expect the bank to raise interest rates by 25 basis points at the policy meeting next week, after slowing its hawkish pace to 50 basis points last month following four consecutive increases of 75 basis points each..

With lower interest rates curtailing returns on assets such as government bonds, investors may prefer non-yielding gold as a safe haven from interest volatility..

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