The price of gold on world markets succumbed to rising US dollar
Stock Markets Group – Rate of gold in the environment remains under pressure as traders evaluated the information after yesterday’s speech of the new head of the fed Jerome Powell.
At the moment the price of gold increased by$ 1, reaching the level of $ 1,320 per Troy ounce. Despite the rise in the dollar, the precious metal managed to survive the burst of optimism of traders in the foreign exchange market and active buying of the us currency.
However, experts say that the “hawkish tone” of the chapters and the expected growth of pressure on the rate of gold in the coming days.
In his first speech before Congress, Powell said that the gradual increase in rates is justified, and inflation is under control.
However, analysts believe his statement a bit harsh and biased, as he later said that he expects a fourfold increase in rates this year. His speech was too optimistic, which caused the growth rate of the U.S. dollar and weighed on gold and commodity market.
So, according to the new head of the fed, the recent stock market correction will not convince the fed to delay further rate hikes.
“At the moment we do not see that these events largely depend on the prospects of the economy, labour market and inflation. In fact, economic growth remains strong”
Still some time, market participants will assess the future prospects of the gold market and future dynamics of the dollar.
Considering the latest information, there is a high probability that the fed will stop tightening monetary policy. This in turn can have a negative impact on forecasts for gold that were voiced by experts at the beginning of the current year.
Analyst of commodity markets,
Stock Markets Group™