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    XAU/USD: Gold has grown in price by almost 8% since the beginning of the year on 04.02.2016

    Yesterday’s weakening in the USD has supported oil prices and commodity currencies. The price of precious metals, including gold, has significantly grown yesterday. The price of gold continues to grow since the beginning of the year and has reached the highs for the last three months yesterday. By the closing session at COMEX April futures of gold rose by 1.3% up to 1141.30 USD per ounce. Price-spot reached the level of 1145.00 yesterday. Since the beginning of the year the price of gold rose by 8%.

    The signs of slowdown in the US economy can cause difficulties in making decision about raising interest rate at the US Fed meeting in March.

    According to the data released by the Institute for Supply Management (ISM) on Wednesday, index of purchasing managers (PMI) in the US non-manufacturing sector fell to 53.5 in January versus 55.8 in December.

    Service sector accounts for 90% of the US economy and slowdown in this area of economy can prevent the US Fed from rising interest rate at the meeting in March.

    If stringent financial conditions, mentioned by New York, Fed president, William Dudley continue and the world economic situation does not improve, the prospects of gradual tightening of the US monetary policy could be put in jeopardy. In this case the USD will not rise, while gold will be in demand among investors.

    Gold decreases in price in case of the rises in the interest rate, which in turn, leads to the rise in the USD and the borrowing costs for the purchase and storage of gold.

    If there is no ground for the increase in interest rate and amid worsening of the global economic situation, gold will be in a stronger position versus the USD and high-risk currencies and the price of gold will grow.

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