Uncertain market conditions push up gold prices
- 2021-07-16
As the US dollar begins to lose its value, investors look for alternative sources of investment to keep prices afloat. Gold is an option.
US consumer price index is rising. After an annual rate of 5 percent in May, it continued to rise to 5.4 percent in June. This is the highest level in 13 years. The biggest factor is the increase in the price of used cars. In addition, food prices, crude oil prices have risen due to the unusual weather and the rapid recovery of low-cost airfare. All of these factors seem to continue until next year. In addition, the current provisional inflation will continue, depending on whether wages will rise that can maintain purchasing power. As a hedge measure, investors continue to buy more gold by curbing long-term inflation.
One other hand the dollar also weakened due to a long-term drop in US interest rates, prompted by Federal Reserve Chairman Jerome Powell during a congressional hearing on Wednesday and the start of policy tightening. The Bank of New Zealand will be followed by the Bank of Canada and possibly the United Kingdom, pushing gold to $ 1830 an ounce.
However, with US interest rates falling, investors need to find out how gold prices will rise. Because U.S. Treasury yields will rebound when they fall to 1.2 percent, indicating a reversal in gold.
Today XAU / USD Trading Forecast 1815-1850.
Analyzed by: Mr. Tum Sothoeurn, Independent Analyst