Gold News: Abenomics Drive Dollar Strength And Suppress Gold

Gold News

In the latest gold news: As of October 23 at 10:20am EST, gold was trading at $1274.81 per ounce, dropping back down from the previous price jump up to $1300. At approximately this time last week, gold was trading at $1303.74 per ounce.

gold news


This weekend marked a very interesting time for the gold market. The recent political events in Japan have had a critical effect on gold’s prices. After a landslide victory for Prime Minister Shinzo Abe in the election, the yen weakened tremendously in relation to the dollar. Consequently, the dollar’s strength caused the prices of gold to drop as investors move away from the safe-haven investment and take on more volatile stakes. In order to understand this turn of events, we need to know that Prime Minister Abe is famous for his self-titled “Abenomics”. These are a set of policies which are designed to provide more monetary and fiscal stimulus which is meant to weaken the Yen, combined with a set of structural reforms for the Japanese economy. This means that the Yen-Dollar relation has weakened, and as a consequence the dollar appreciated.

Furthermore, we also need to take in to consideration the occurrences in America. The dollar has been riding the momentum of the events in Japan, but it is also boosting itself on the back of hopes of a tax reform, as well as the possibility of higher interest rates in the U.S. Currently, the gold has dropped down to the 100-day moving average, and stands to drop even further soon. For example, if the reported third interest hike the Federal Reserve has been touting occurs, then this will sharply drop the price of gold, since it it highly sensitive to interest rate policies. There are analysts who believe the price of gold will drop to around $1250 or lower in the event of the third interest rate hike which is expected to occur in December. As it currently stands, gold benefits from geopolitical tensions such as those between North Korea and America, but as these settle and investors become more acclimatized to these swings, the market will account for this and gold will stabilize.

This sentiment remains prevalent and is causing the bullion to remain somewhat steady below this year’s high. 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.


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