Gold Plummets to a Two-Week Trough as the Dollar Ascends
Gold, a precious metal often seen as a haven investment during turbulent
times, stumbled to its lowest level in two weeks on Tuesday. This decline
was a result of an upswing in the dollar and keen anticipation from traders
for signals about interest rates from a series of Federal Reserve officials'
speeches scheduled this week.
Gold in Spot Transactions and Futures:
Gold in spot transactions suffered a 0.5 percent drop to $1,967.09 per
ounce by 1050 GMT, marking its lowest level since October 25. Similarly,
gold futures witnessed a more significant 0.8 percent fall to
$1,973.50.
Impact of the Rising Dollar:
The rising dollar index, which increased by 0.4 percent, has made bullion
more expensive for overseas buyers, thus putting downward pressure on gold
prices.
Observations from Market Analysts:
Carlo Alberto de Casa, a market analyst at Kinesis Money, highlighted that
the gold market is awaiting more cautious signals from the US Central Bank
before it can continue its upward journey. He noted that prices are
consolidating after sliding into the overbought zone.
Gold’s Performance in October and Its Status as a Safe Haven:
Despite recent losses, gold experienced a surge of more than seven percent
in October. This rise was fueled by increased demand for the metal as a
haven amid conflicts in the Middle East.
Anticipation for Federal Reserve Officials' Speeches:
Investors are currently on the edge of their seats, awaiting a set of
speeches from several Federal Reserve officials this week. The spotlight
will be on Chairman Jerome Powell, who is scheduled to speak tomorrow,
Wednesday, and the day after tomorrow, Thursday.
Predictions for US Central Bank Interest Rates:
Investors estimate a 90 percent likelihood of the US Central Bank
maintaining stable interest rates at its meeting in December. Meanwhile,
according to the CME Fed Watch service, there is an approximately 80 percent
chance of a rate cut in June next year.
However, Neel Kashkari, President of the Minneapolis Federal Reserve Bank,
suggested that the central bank has more work to do to control
inflation.
Performance of Other Metals:
In terms of other metals, silver fell in spot transactions by 1.6 percent
to $22.66 per ounce, platinum by 0.7 percent to $899.10, and palladium by
1.3 percent to $1,092.22. This dip brings palladium's decline to 39 percent
so far this year.
The performance of gold, like all commodities, is influenced by a complex
interplay of global events, economic indicators, and market sentiments. With
upcoming speeches from Federal Reserve officials and the fluctuating dollar
strength, market participants will be keenly observing these indicators for
future investment decisions. The recent dip in gold prices serves as a
reminder of the volatile nature of global markets and the importance of
diverse investment strategies.
