Gold News: Gold Slowly Recovers From Big Loss

Gold News

In the latest gold news: As of February 5 at approximately 12:22pm EST, gold was trading at $1336.40 per ounce, dipping slightly after reduced prices last week. At approximately this time last week, gold was trading at $1343.37 per ounce.

gold news

Upon market open today, gold has managed to claw back some of its loss and resettle at a higher price point–one closer to last week’s. It previously had its biggest single day loss in two months due to the dollar easing up and taking pressure off the metal. The 1.2% drop due to much stronger than anticipated US payrolls data followed expectations that an increase in inflation would cause more interest rate hikes down the line this year, which would boost the greenback. In the wake of that information, it is understandable that the bullion eased, since it is intricately linked to the dollar and a stronger dollar often means less interest in gold. Carlo Alberto de Casa, chief analyst for ActivTrades, explained the change this morning over the end of session last week as the following, “The greenback is weakening again, and this is supporting the recovery of the [gold] price after Friday’s fall, which was mostly due to growing expectations for a hawkish Fed in 2018”.

In further analysis, stock markets struggled around the globe at the opening of the market today, and bond yields rose as the reappearance of US inflation pushed the idea that the central bank would tighten policy more aggressively than expected. While one would expect this to be a further push for gold due to its role as an inflation hedge, company Julius Baer noted that the price pressures were coming from growth confidence rather than dollar weakness and rising oil prices meant that gold was not reacting positively. It explained, “‘Good’ inflation is a consequence of an improved growth backdrop, leading to an increase in wages that pushes up prices and services […] as it should be accompanied by rising interest rates, the inflation uncertainty appears limited. Hence, gold’s drop on Friday”. Overall, the futures market in general showed signs of pricing in three or more possible rate rises from the US Federal Reserve this year.

This sentiment has caused the bullion to remain fluctuating around upper price bounds, at least for now. In the 14-day gold prediction ending January 02, I Know First’s algorithm based on a stock prediction algorithm showed an impressive 100% accuracy rate, as seen in “Gold Forecast Based on Algorithmic Trading: Returns up to 4.53% in 14 Days.” After a fortnight, I Know First’s average percent change came out to 4.53% with GLD as the top earner, bringing in an impressive 4.53% return to investors.

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