The strengthening exchange value of the US dollar (USD) in commodity gold trades sent the price of investment gold lower. According to commodity market analysts, the current gold price reached its five-week low. Currently, during Monday European almost true noon on August 14, 2023, at approximately 11:57 CET, investment gold was traded on the commodity market COMEX (Commodities Exchange Centre) at a value of USD 1,945.70 per troy ounce with the previous daily by a decrease of -0.05% of its previous price.
This price of investment gold in the commodity market was achieved when the exchange value of the US dollar (USD) measured by the dollar index DXY (US Dollar Currency Index) reached a point level of 102.83 USD points with a purely technical decline of -0.01 so far % of point value according to this index. According to the communication of economic correspondents in connection with the financial strategists of the commodity market, the current situation thus reflects the application of the so-called inverse rule, in which a strong USD causes a drop in the price of investment gold, as the purchase becomes less attractive for investors and traders from outside the dollar zone. On the indicated day and time, the global currency pair of the single European currency, the euro (EUR) and the US dollar (USD), as the main world commodity currency, moved within the forex operations of the foreign exchange market at a mutual exchange rate at a value of 1.095 USD per EUR with the previous by the growth of the EUR by + 0.04% of the exchange rate against the USD.
The current price of gold according to technical analysis data is still maintaining a slightly profitable trend, with the value of investment gold showing a year-over-year increase of +3.66% in price over the last 52 weeks, of which the increase since the beginning of 2023 these technical analysis charts indicate a volume of + 1.82 percent. In this context, analysts point out that the current monetary policy of the central bank of the US Federal Reserve System (FED) has increased the interest of investors in US government bonds by further increasing interest rates. U.S. bond yields rose, lifting the U.S. dollar (USD) exchange rate to its highest since July 7, 2023, after data on Friday 11/08/2023 showed producer prices rose slightly more than expected in July as utility costs rebounded at the fastest pace in nearly a year. “The US dollar appears to be rising on the back of markets finally realizing that even with the Fed on hold, commercial rates and bond yields are likely to continue to rise,” said Clifford Bennett, chief economist at ACY Securities.
Higher interest rates and US Treasury yields increase the opportunity cost of holding interest-free gold, which is denominated in US dollars (USD). China’s data on retail sales and industrial production are scheduled to be released this week, tomorrow, Tuesday, August 15, 2023. Markets also await US retail sales data this Tuesday, followed by the minutes of the July meeting of the Federal Open Market Committee Federal Reserve System (FOMC FED) on Wednesday, August 16, 2023, referred to as like the FED’s minuteman. “Fed minutes this week will definitely be hawkish, so gold may remain under pressure and possibly go down to $1,900 or even $1,880 per troy ounce,” Bennett said. Responding to investor interest in gold, the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell to their lowest level since late January 2020. Comex gold speculators also cut net long positions by 23,755 contracts to 75,582 in week until August 8, Friday’s data from August 11, 2023 just showed.
