Gold prices rise as the value of the US dollar falls – Nairametrics
Gold prices edged up during the Asian trading session on Tuesday. This gain was triggered by the US dollar which lost part of its value.
we gold futures gained around 0.17% to trade at $ 1,942.55, as at the time of writing.
Over the past week, the dollar index has held close to a peak of more than a week, making gold more expensive for holders of other currencies. However, gold bulls reversed the downtrend, even as the the greenback the value has lost ground recently
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In a note to Nairametrics, Stephen Innes, chief global markets strategist at AxiCorp, explained the current volatility in the precious metals market and the price levels at which gold prices will remain, in terms of prevailing macros. He said:
âThe gold rally stuttered over a combination of less conciliatory messages from last week’s FOMC minutes and news feeds on dealing with positive viruses.
âDemand between $ 1,875 and – $ 1,925 is expected to remain relatively stable with the expectation that the fed funds rate will be low for a very long time. The Fed has made it clear that it will continue with its current accommodative policy through much of the recovery.
“The Fed isn’t leaving the party anytime soon, as markets further divide the economy between the haves and have-nots and should be enough to float gold.”
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It should be noted that a lot went wrong for the yellow metal at the start of the trading week. With high hopes for a COVID-19 cure, with President Trump’s Republican convention starting with pro-business policies and a stimulus trade deal remaining intact due to damage to the labor market of the world’s largest economy, he may be difficult for gold prices to break their recent high.
Quick fact: Humans primarily use gold to make jewelry, physical coins, and recently for industrial purposes such as the production of electronics. However, it is quite rare that many people do not have it, or have it in trace amounts. Humans are emotionally and physically attracted to gold. Therefore, it provides a significant store of value. Global investors buy gold to hedge against inflation.