Gold prices rise 11 dollars with the decline of the US currency

Gold prices rise 11 dollars with the decline of the US currency
Gold prices rise 11 dollars with the decline of the US currency
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Gold prices rose by more than $11 during trading today, Tuesday, January 24 (2023), with the decline of the US currency.

The near-term path of the precious metal is likely to hinge on US economic data – scheduled for this week – which may influence the Fed’s interest rate strategy.

Gold prices today

By 08:19 am GMT (11:19 am Mecca time), the price of gold futures contracts – delivery April 2023 – increased by 0.58%, equivalent to $ 11.20, to reach $ 1956.60 an ounce.

And gold prices ended their dealings, yesterday, Monday, January 23, with a marginal increase, to record the highest level since April 2022, amid limited transactions in conjunction with the Lunar New Year holiday in East Asia.

And the price of immediate delivery of the yellow metal increased by 0.44%, to record $ 1939.63 an ounce.

While the price of silver futures contracts – delivery of March (2023) – increased by 0.85%, recording $ 23.76 an ounce.

The spot platinum price increased by 0.39%, to $1055.15 an ounce, while the spot palladium price decreased by 0.01%, at $1710.77 an ounce.

At the same time, the dollar index, which tracks the performance of the US currency against 6 major currencies, declined by 0.3% to 101.84 points.

conditions of the gold market

Major hubs such as China and Hong Kong remain closed due to the Lunar New Year holiday.

A woman looking at gold jewelry in an exhibition – Photo courtesy of Reuters

Investors are awaiting the US GDP growth forecast for the fourth quarter, which will be released next Thursday.

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“Any signs of weakness in the US economy will be taken as one of the reasons 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,” said Matt Simpson, senior market analyst at City Index.

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He added, “The disappointing numbers are likely to help gold rise above $1,960, but it may not breach $2,000 on its first attempt, given the importance of the number,” according to Reuters.

interest rates

Traders are mostly pricing in a 25 basis point rate hike by the Federal Reserve at its next policy meeting from January 31 to February 1, after its pace slowed to 50 basis points in December, after 4 months. Sequential gains of 75 basis points.

Lower interest rates tend to be beneficial for the yellow metal, reducing the opportunity cost of holding non-yielding assets.

Demand for gold and silver

On the physical front, India is expected to lower gold import duties, which could boost retail sales ahead of peak demand season in the world’s second largest consumer of bullion.

India’s gold futures hit an all-time high on Tuesday, tracking gains in overseas markets and a weaker rupee, but the rise dampened demand in the world’s second-biggest consumer of the precious metal, dealers said.

On the other hand, analysts said that with the reopening of the Chinese economy and reducing the disruption caused by Corona, it may support a consecutive year of record demand for silver.

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