The market’s eyes are set on the upcoming statements that Jerome Powell and his ECB counterpart, Christine Lagarde, would make this week.
Gold strengthens in the face of uncertainty over central bank decisions
This Tuesday, the gold price experiences a slight rise driven by the hopes generated around the measures of economic stimulus taken by Chinathe main buyer of lingots physical worldwide. Traders are expectant, awaiting with interest the crucial decisions that would be made by the central banks about Interest rates.
Spot gold registers an increase of 0.4%, reaching US$1,961.34 per ounce, while gold futures in the US they are also advancing 0.2% or $3.9 reaching US$1,963. For its part, gold quoted in euros reached maximum levels in a month, according to data from Reuters.
On Monday, Chinese leaders reaffirmed their commitment to intensify support policies to its economy, in an effort to boost domestic demand and face the challenges that have arisen after the economic crisis. This, in turn, generated optimism in the markets and led analysts such as peter fertigof Quantitative Commodity Research, to assert that Beijing’s statements regarding economic stimulus could have a positive impact in retail demand for gold by Chinese consumers.
It is important to highlight that during the first half of 2023, gold consumption by China experienced a significant increase of 16% compared to the previous year, with an increase close to to 15% in the consumption of jewelry.
However, the eyes of the market rest on the statements that will be made throughout the week by the president of the Federal Reserve Jerome Powell and its counterpart from European Central Bank, Christine Lagardein their respective meetings in which they would discuss the perspectives of the monetary politics. the rise of interest ratesif it occurs, would increase the opportunity cost of holding gold bullionsince these do not generate interest.
About other precious metals, the silver cash registers an increase of 0.8%, reaching US$24.57 per ounce; the platinum earns 1.3%, reaching US$968.50; and the palladium experiences an improvement of 1.6%, reaching US$1,291.52.
In summary, gold experiences a rise motivated by expectations of economic stimuli in China and trader interest in upcoming central bank decisions on interest rates, keeping investors on the lookout for statements from leaders the Federal Reserve and the European Central Bank.
Source: Ambito
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