The price of gold fell slightly, but remains stable
On Tuesday, gold prices dropped as traders shifted attention to riskier assets after fears of a US recession have faded into the background
Global stocks surged and the U.S. dollar also remained stable, which resulted in the price of gold for almost the entire session. The cost of the April futures on the metal fell to 7.60 or 0.6%, to 1315 dollars per ounce.
On Monday, April gold futures closed up 10.30 per ounce at around 1322.60$, which is the highest figure since February 26, 2019.
The yield on 10-year U.S. Treasury bonds has recovered from the lows of 2017, achieved in the previous session, which helped to ease investor concerns about impending recession in the United States.
On Monday, the President of the Chicago Federal reserve Bank Charles Evans said that the chances of a recession do not exceed 25% and that a little reassured the markets.
Speaking at a forum at the Credit Suisse Asian investment, a former Chairman of the Federal reserve Janet Yellen said that he sees no signs of recession, due to the recent sharp fluctuations in the bond market. She said that such behavior of the markets may indicate the need to reduce rates in the future.
When Yellen was asked about the inversion of the yield curve, she said, “I do not see any signs of a recession,” and added that yield curves tend to be smoother than in the previous period, so the inversion may not have the same value as it once was.
“Yes indeed, US economic growth is slowing down a bit, but I don’t see him slowing down to a level that will cause a recession. In fact, it may signal that the fed at some point will need to return to lower interest rates”
Meanwhile, in economic news today, the report of the Ministry of Commerce showed that the number of new homes in February fell by 8.7% to an annual rate of 1,162 million, After rising by 11.7% to a revised reading of 1.273 million in January.
The Commerce Department reported that building permits fell 1.6% to an annual rate of 1.296 million, in February after falling by 0.7% to a revised level of 1.1317 million, in January this year.
Rate of gold in the current situation acts as a kind of barometer and indicator of the situation in the world economy, so any changes and the weakness of macroeconomic indicators, will support the yellow metal, as investors would transfer capital to the assets of refuge.
Analyst of commodity market
Stock Markets Group