Gold News: Inflation Worries Lead To Uncertainty In Dollar-Gold Relationship

Gold News

In the latest gold news: As of October 16 at 12:41m EST, gold was trading at $1303.74 per ounce, remaining steady at a price range below the previous heights of $1300. At approximately this time last week, gold was trading at $1280.32 per ounce.

gold news


Gold has once again returned to above a key psychological level of $1,300. It seems to be holding steady around this area, and despite contrarian reports from a Goldman Sachs analyst that gold might soon fall to a support level of $1,100, the market continues to have faith in the safe haven feel of the precious metal. This increase on previous weeks owes part of its movement to the geopolitical tension between America and North Korea, as well as global worries about America’s current relations with Iran. However, the rally is also partly due to the recent Federal Reserve’s comments on worries about inflation rates. Federal Reserve Chair Janet Yellen recently stated that ‘The biggest surprise in the U.S. economy this year has been the inflation”, and this follows a global trend of worry on inflation rates. If this happens, investors are worried that the Fed will hold out on its third interest rate hike scheduled for the end of year. Readers will remember that the interest rate hike news when announced in recent months caused the dollar to strengthen and thus lead to a weakened gold status. The inverse is true in this case; as investors worry about the possibility of a delayed interest rate hike, the US dollar reacts negatively and thus promotes gold’s safe-haven status once more, hence boosting the bullion.

Overall, however, the general investment sentiment is that gold will remain within a relatively confined boundary at around this price level. As aforementioned, a Goldman Sachs analyst does believe a drop is due soon, but the market is not reacting as if this will occur and most investors expect the gold to remain solid, although also expect limited upside in terms of price growth potential. While the political situation remains somewhat tense, it will be difficult to see gold losing its safe-haven status soon.

This sentiment remains prevalent and is causing the bullion to slowly climb and remain somewhat steady. In the 90-day gold prediction ending September 16, I Know First’s algorithm based on a stock prediction algorithm showed an impressive 100% accuracy rate, as seen in “Gold Price Predictions Based on Deep Learning: Returns up to 5.24% in 3 Months.” After a month, I Know First’s average percent change came out to 5.22% with XAU as the top earner, bringing in an impressive 5.24% return to investors.


Comments are closed.