Gold News: Lessening Geopolitical Danger And Hawkish Fed Create Downward Pressure
Gold News
In the latest gold news: As of April 23 at approximately 12:49pm EST, gold was trading at $1323.59 per ounce, fairly down over the previous week. At approximately this time last week, gold was trading at $1343.36 per ounce.
Following the severely increased geopolitical tensions, which led to a spike in investment in safe-haven assets such as gold, this week sees gold tumbling to a much lower price point. In less than a week, gold prices fell from around $1356 to below $1331. This follows the heels of a few important news points. Primarily, geopolitical tensions seem to have eased up greatly as North Korea announced that it will be discontinuing its nuclear tests and will close down its nuclear test site. The current plan is to see a meeting between President Trump and the North Korean leader in June to possibly discuss complete demilitarization. The relief that this news has provided to the market has led to gold falling in its price as the demand for anti-fiat assets decreased in the face of a lack of crisis. According to some technical analysis, gold prices were due to drop regardless of the results of the political situation. Although Syria remains a worry, it is evident that the market feels relieved and that the situation has alleviated somewhat.
There were a couple of other factors at play which maintained a role in the loss of interest for gold and a decrease in the price point. Last week saw an extremely hawkish speech on the part of the Fed Governer Lael Brainard, who spoke of “building pressure cycles” and “elevated risk”. The market interpreted this as an implied pickup of inflation, especially as Brainard spoke of fiscal stimulus reinforcements, stretched asset valuations and “complacency” about vulnerabilities. Rising rates drove up the US dollar, which as often illustrated caused downward pressure on the bullion. The increased speculation about an accelerated Fed rate hike cycle drove the US dollar higher and soured market sentiment, leading to increased demand for risky assets and higher interest rates. It is looking increasingly likely that gold will remain under the pressure of this market movement for a while while. It remains to be seen whether gold will push back and rise up or will continue to be dragged further downward by bearish sentiment.
This sentiment has caused the bullion to remain fairly volatile for the year. 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.
