Gold fell for the first time in three months: is it time to invest?

Gold fell for the first time in three months: is it time to invest?

He gold It rose on Wednesday, thanks to falling Treasury yields, but the strength of the dollar, with more interest rate hikes in the offing, and optimism about a US debt deal led bullion higher. to register his first monthly drop in three months.

Spot gold was up 0.4% at $1,967.29 an ounce. For the month it lost 1.1% and $100 from the all-time highs reached in early May. Gold futures in the United States advanced 0.5% to $1,987.20.

Job openings in the United States rose unexpectedly in April and data for the previous month was revised up, pointing to continued strength in the labor market that could force the Federal Reserve to raise interest rates again in June.

The dollar index headed for a monthly gain, making bullion less attractive to foreign buyers.

Investors priced the chance of a 25 basis point hike at the June Federal Reserve meeting at 68.8%, up from 60% before the jobs data. High interest rates make zero-yield gold less attractive.

However, “key support around $1,950 could push gold to $2,000”according to Edward Moya, market analyst at OANDA.

Traders were also focused on developments surrounding the US debt ceiling, with the House of Representatives preparing to vote later in the day on a bill to raise the limit.

In other precious metals, spot silver rose 1.3% to $23.52 an ounce; platinum fell 1.7% to $996.68; and palladium fell 2.4% to $1,366.67. All three posted a monthly drop.

Is it time to buy?

Gold tends to appreciate against lower interest rate expectationssince you are they reduce the opportunity cost of holding bullion, which does not earn interest.

Gold is considered a safe haven asset. Its ability to preserve wealth and its greater security as an investment, compared to the volatility of paper-denominated currenciesearned him that name.

In general terms, one of the best times to invest it is when the asset trades at a cheaper price.

What is the use of buying gold? As gold is used as a safe haven asset, Yeah there is a fall in the dollar or there is a forecast that a global crisis will break outgold will always be an advisable investment.

Source: Ambito

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