Gold prices reached a more than six-month high this MondayIt has consolidated above the $2,000 per ounce level. Specifically, it gained 0.5% and is trading at $2,014. Reason? A weaker dollar and expectations The end of the Central Bank’s interest rate increase They are over.
Gold reached its highest level since May 16, when it reached $2,017.82. Just $60 away from August 2020 all-time high When it reached $2,072.49. At the technical analysis level, being above the 50, 100 and 200 session moving averages shows the current strength of the price. It’s up 10 percent so far this year, and 15.5 percent in the last twelve months.
Despite this strength, CMC Markets analyst Luis Francisco Ruiz points out that gold’s all-time highs “are key resistances as they hold the price back in many cases: 2020, 2022 and 2023.”
Likewise, the rise of gold occurs in a period when the market is weak. The US dollar lost nearly 2 percent of its value against the euro and nearly 3 percent against the pound sterling. and 4% against the Swiss franc. This fact makes gold cheaper for those who hold currencies other than the dollar and encourages its purchase.
“The positive momentum that gold has gained in recent weeks may also spread to silver, another precious metal that is more of a refuge element. The main reasons for this movement are the weak dollar and low interest rates. “Geopolitical uncertainty, the other big variable that usually moves gold, has fallen in these weeks.”Ruiz’s views are as follows: Both the war in Ukraine and the war in Gaza do not seem to move the markets. Ibex 35 looks at 10,000 points.
XTB analyst Joaquín Robles emphasizes that gold provides “stability and low volatility” to a portfolio. “We see gold not only as a safe haven but as a reserve of value. Holding a portion of our portfolio in gold is always a good option. Gold maintains its value and can even appreciate. The best way to do this is with an ETF,” he emphasizes.
Inflation took a break
Investors’ attention is focused on revised U.S. third-quarter GDP figures released on Wednesday and the personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge, on Thursday. Reuters.
Recent data indicating a slowdown in US inflation has increased expectations that the US central bank will pause interest rate hikes. US consumer price index (CPI) stood at 3.2% annually in OctoberThat has translated into a five-tenths moderation since September, according to the country’s Labor Ministry’s Bureau of Labor Statistics.
Core inflation, which excludes food and energy prices from the calculation due to their high volatility, completed the tenth month of 2023 with an increase of 4%, decreasing by a tenth compared to the previous month, and at its lowest level since September 2021.
Related news
Operators hope for this Fed keeps interest rates in DecemberThey calculate a roughly 60% probability of an outage in May next year, as Chicago Stock Exchange (CME) futures show.
Lower interest rates Reducing the incentive to have non-interest bearing assets in the portfolioThis generally drives gold prices.