Gold Price News: A Rebound Due To Disappointing US Data
Gold Price News
Gold prices have fallen for four straight quarters. Such decrease had never happened since 1997. Last week, gold value hit a low of Rs 26,500 per ten grams at the bullion market but we could see a little recovery. In fact, standard gold increases by 40 Rs to close at Rs 26,190 per 10 grams from Friday’s closing level of Rs 26 150.
We could have expected a higher rise of gold prices through the Greece crisis. On Tuesday, Greece defaulted on their loans given by the International Monetary Fund. The uncertainty about the Greek economy future is at the highest level. We are wondering about the “Grexit” while the vote of the referendum is taking place today.
This crisis situation might encourage people to invest in the heaven asset but the demand didn’t increase as much as we could expect. The important probability of a September interest rate rise by the FED reduces the gold’s attractiveness. A higher interest rate will lead to a stronger dollar so investors would be more interested to invest in assets instead of the gold asset. The gold demand is weaken by the signs of an improving US economy. Nevertheless, improvement signs could take more time to set up.
Yesterday, data showed the US jobs growth is weaker than expected. Given this data, the dollar tends to weaken and so on the probability to see an increasing interest rate is postponed. The Greek vote and the dollar decline explained why the gold value rebounds.
