The U.S. dollar and Treasury rates declined on Thursday, reviving investor interest in gold as they wait to see what interest rate signals central bankers would provide at the Jackson Hole conference. Gold prices have already reached two-week highs.
Gold hitted its high
By 08:10 GMT, spot gold was up 0.3% and at $1,920 an ounce, it had risen to its highest level since August 10. At $1,948.90, U.S. gold futures were unchanged.
From August 24-26, the Federal Reserve will host its annual symposium in Jackson Hole, Wyoming. Investors will be watching Chair Jerome Powell’s address on Friday to determine whether interest rates will continue to rise.
U.S. retreat
The opportunity cost of owning gold, which pays no interest, increases when U.S. rates rise. After weaker-than-expected global economic statistics, the dollar and U.S. rates declined. Baden Moore, head of carbon and commodities strategy at National Australia Bank, stated that the lower (PMI survey) result “pares the risk of further rate hikes in the U.S. and Europe, in our view, which is broadly positive for gold prices and applies downward pressure to U.S. Treasury yields.”
With growth at its weakest since February, American economic activity nearly reached a point of standstill in August. Meanwhile, Britain’s economy is also faltering and may be about to enter a recession.
Deepening stock market pain
As severe declines in company activity suggested that the economy was becoming more painful, traders also increased their wagers that the European Central Bank would suspend rate increases in September.
According to Reuters technical expert Wang Tao, safe-haven gold may continue advances into a range of $1,928-$1,934 per ounce. Spot silver decreased by 0.6% to $24.19 an ounce, while platinum increased by 0.1% to $930.38. To $1,265.47, palladium fell by 0.7%. A retest of silver’s year-to-date high, which is about $26, can be possible if immediate resistance at $24.50 is overcome, according to Yeap Jun Rong, a stock market strategist at IG.
Traders are waiting for
This week, the stock markets are anticipating a flood of economic reports from the largest economy in the world, including information on Q2 GDP, PCE inflation, and nonfarm payrolls. The US economy increased far more than anticipated in the second quarter, according to an earlier measurement of GDP, proving that activity had not slowed as much as the Fed had first anticipated.
In addition to growth, metal prices may be further impacted if inflation is high, and the employment in the stock market continues to be robust.
Bottom Line
Amit Khare, Associate Vice President at GCL Broking, claims that yesterday’s close for MCX Gold and Silver was favorable. September Silver finished at 73612 (0.09%), and October Gold closed at 58887 (0.42%). The daily charts for gold are interesting. In the near future, we can expect a positive upward movement. The same is also indicated by the RSI momentum indicator. Therefore, traders are recommended to open new buy positions in Gold and Silver close to the indicated support level one with a stop loss at the indicated support level two and to book positions close to the indicated resistance levels.