The US currency is showing weakness and is teetering near its lows in more than a year, after posting its worst week of 2023 last week.
Gold takes flight: scores highs in a month while the dollar spins its worst fall
In a scenario where the dollar it gets weak, the price of gold this one takes flight with force tuesday july 18supported by the expectation of investors before the data of retail sales in USA. These data could have a significant impact on the outlook for monetary policy from the federal reserveespecially amid signs of cooling of inflation.
In this context, spot gold shows an increase of 0.4%, reaching the US$1,962.19 per ounce. For their part, gold futures in the US also improve a 1.4% up to US$1,983.80.
He dollar index shows weakness and is teetering near lows of more than a year, after recording its worst week of 2023 last week. This weakness in the US currency makes gold more affordable for foreign investors.
Gold: a new level of support
Ricardo Evangelistaof ActivTrades, points out that “there appears to be a new level of support for gold andn $1,950 and prices are unlikely to fall below in the near term.” However, Evangelista also adds that while other major central banks have not yet completed their rate-raising cycles, it is likely that the dollar remains under pressure, which could benefit gold prices. However, he also mentions that interest rates in the United States are unlikely to start declining in the short or medium term, which would somewhat limit increases in gold prices.
Interest rates are expected higher ones increase the opportunity cost of owning gold bullion, since these do not generate interest. Markets anticipate another 25 basis point interest rate hike at the Federal Reserve meeting on July 25-26.
The operators are waiting for the data of retail sales and industrial production in the United Stateswhich will be published later in the day and could influence the direction of the market.
As for other precious metals, cash money it operates little changed, trading at $24.87 per ounce; platinum shows stability at u$s975.67; and palladium registers an increase of 1%, reaching US$1,296.28.
Source: Ambito
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