Global gold prices rose during trading today, Thursday, July 13, to their highest level in about a month, supported by the decline in the dollar after US inflation data, which raised hopes that the Federal Reserve (the US central bank) would soon stop tightening its monetary policy.
Global gold prices.. During spot transactions, gold rose 0.2% to $1959.94 an ounce by 09:18 GMT, its highest level since June 16, while US gold futures achieved slight gains by 0.1%, to $1964.40.
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Gold is at its highest level in 4 weeks
Analyst at “Cinesis Money” Carlo Alberto de Casa said that with two weeks remaining until the next US central bank meeting and in light of data showing lower job growth and slower inflation in June, there are expectations that the next interest rate hike will be the last.
Consumer prices in the United States rose slightly in June, posting their smallest annual increase in more than two years, as inflation continued to decline.
As for other precious metals, silver rose in spot transactions by 0.3% to $24.22 an ounce, and palladium rose 1.1% to $1296.25.
Platinum rose 1.4% to $960.04.
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The decline in the dollar globally pushes gold to its highest level in a month
The dollar index recorded a decline for the sixth session in a row, falling by 3%, and is currently trying to break the support level at 100 points, which opens the door for further declines in the levels of the US dollar against other major currencies, according to Gold Billion analysis.
It is worth noting that the weakness of the dollar was the first factor behind the rise in gold prices in light of the inverse relationship between them since gold is a basket that is priced in dollars.
The decline of the dollar globally .. The yield on 10-year government bonds declined for the fourth day in a row, to decline since the beginning of the week by 6.3%, and to record the lowest level in more than 10 sessions, at 3.813%
The decline of the dollar globally .. While the yield on the two-year bonds, which is most affected by interest expectations, fell by 5.9% since the beginning of the week, to record its lowest level in 4 weeks at 4.647%.
The decline of the dollar globally.. The weakness of the yield on government bonds increases the attractiveness of gold for investment, which is evident from the momentum that witnesses gold on the rise this week, taking advantage of US inflation data that pushed the dollar to a sharp decline.
Today, the markets are awaiting more data on the US economy, as the producer price index for the month of June is announced today, which is an indicator that measures inflation from the point of view of companies and producers, in addition to data on the number of applicants to fill weekly unemployment benefits.
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The yellow metal.. Will gold prices decline in the second half of 2023?
The head of Target Investment Company, Noureddine Mohamed, confirmed in his statements that gold prices started the year strongly as a result of the uncertainty in the markets and the weakness of US economic indicators, and the Federal Reserve raised interest rates, as they represented strong reasons that gave support to gold.
Noureddine Mohamed added that the first half of the current year witnessed strong demand from central banks for gold as a hedge.
He explained that the situation was different after that, and the currencies of some countries began to decline, and those countries resorted to strengthening their currencies, and a torrent of central banks selling gold began, led by the Turkish Central Bank, which sold 70 tons of gold in April and 81 tons in May, and therefore the gold supply increased in the market.
He pointed out that, on the other hand, the purchase of gold traded funds increased, but it did not support the yellow metal in light of the large sales from central banks in the period from May to June, and that was the main reason for the decline in the price of an ounce of gold.
The head of the Target Investment Company confirmed that US stocks rose in the past period as a result of the increase in risk appetite, which reduces dependence on gold, which increases reliance on it in the event of fear and uncertainty in the market.
He pointed out that despite the expectation that the Fed will raise interest rates to the top, it is expected to raise them again, which will affect gold prices in the coming period, but they will not reach low levels at 1,600 and 1,700 dollars per ounce.
Prices may witness 1870 per ounce during the current quarter, provided that the Fed will continue to raise interest rates or not on gold prices.