Gold Retreats as the USD Strengthens The price
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Posted On: 12/05/2024 4:45:24 PM
Gold Retreats as the USD Strengthens
The price of gold dropped as the greenback’s value rose, with France’s National Rally Party led by Marine Le Pen announcing that it was willing to support a no-confidence motion against the government led by Prime Minister Michel Barnier.
This is based on disputes over the proposed budget for next year that would see taxes hike and spending reduce in a bid to reduce the country’s deficit. This has in turn, added more pressure on French government bonds and the euro.
On the other hand, the greenback is being strengthened by the U.S. president-elect’s rhetoric on BRICS nations, with Trump himself warning that any country that ditched the USD would have 100% tariffs imposed on them in addition to not being able to export their products into the American economy.
A stronger dollar makes buyers using other currencies pay more for the precious metal, with higher yields weighing on gold as the precious metal doesn’t pay interest.
This comes as investors wait for U.S. data that may provide clues on the Fed’s decision on rates of interest due this week. U.S. nonfarm payrolls are set to be released this week and may influence the interest-rate decision made by the Fed on December 18th.
Markets believe there’s a two-thirds chance that the Federal Reserve will reduce benchmark costs of borrowing by 0.25. Lower costs of borrowing normally bolster the price of gold. Some analysts expect 2025 to be good for the precious metal, with UBS Group AG and Goldman Sachs Group Inc. releasing bullish outlooks.
Following a 2.7% decrease last week, bullion was trading at about $2,640 per ounce. Other metals that saw their prices decline included platinum and silver, with palladium trading in a narrow range.
Over the same period, the Bloomberg Dollar Spot rise by 0.7%. Thus far into the year, the price of bullion has increased by nearly 30%. This increase can be attributed to the Central Bank’s purchases, its monetary easing cycle, and intensifying economic and geopolitical risks.
The losses recorded by the precious metal last week were driven by a decreased appetite for a safe-haven following a ceasefire-deal brokered by the United States between Hezbollah and Israel. The deal came into effect during the same week.
Despite this though, there are still concerns that the deal could unravel after Hezbollah and Israel exchanged fire in recent days. There are also concerns that Russia may escalate its attack on Ukraine in the ongoing war, which would bolster the demand for safe haven assets.
Players in the gold industry, such as GEMXX (OTC: GEMZ) are likely to keep tabs on the price movements of this precious metal over the coming months as those fluctuations could impact their margins on the products they manufacture.
NOTE TO INVESTORS: The latest news and updates relating to GEMXX Corp. (OTC: GEMZ) are available in the company’s newsroom at https://ibn.fm/GEMZ
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
The price of gold dropped as the greenback’s value rose, with France’s National Rally Party led by Marine Le Pen announcing that it was willing to support a no-confidence motion against the government led by Prime Minister Michel Barnier.
This is based on disputes over the proposed budget for next year that would see taxes hike and spending reduce in a bid to reduce the country’s deficit. This has in turn, added more pressure on French government bonds and the euro.
On the other hand, the greenback is being strengthened by the U.S. president-elect’s rhetoric on BRICS nations, with Trump himself warning that any country that ditched the USD would have 100% tariffs imposed on them in addition to not being able to export their products into the American economy.
A stronger dollar makes buyers using other currencies pay more for the precious metal, with higher yields weighing on gold as the precious metal doesn’t pay interest.
This comes as investors wait for U.S. data that may provide clues on the Fed’s decision on rates of interest due this week. U.S. nonfarm payrolls are set to be released this week and may influence the interest-rate decision made by the Fed on December 18th.
Markets believe there’s a two-thirds chance that the Federal Reserve will reduce benchmark costs of borrowing by 0.25. Lower costs of borrowing normally bolster the price of gold. Some analysts expect 2025 to be good for the precious metal, with UBS Group AG and Goldman Sachs Group Inc. releasing bullish outlooks.
Following a 2.7% decrease last week, bullion was trading at about $2,640 per ounce. Other metals that saw their prices decline included platinum and silver, with palladium trading in a narrow range.
Over the same period, the Bloomberg Dollar Spot rise by 0.7%. Thus far into the year, the price of bullion has increased by nearly 30%. This increase can be attributed to the Central Bank’s purchases, its monetary easing cycle, and intensifying economic and geopolitical risks.
The losses recorded by the precious metal last week were driven by a decreased appetite for a safe-haven following a ceasefire-deal brokered by the United States between Hezbollah and Israel. The deal came into effect during the same week.
Despite this though, there are still concerns that the deal could unravel after Hezbollah and Israel exchanged fire in recent days. There are also concerns that Russia may escalate its attack on Ukraine in the ongoing war, which would bolster the demand for safe haven assets.
Players in the gold industry, such as GEMXX (OTC: GEMZ) are likely to keep tabs on the price movements of this precious metal over the coming months as those fluctuations could impact their margins on the products they manufacture.
NOTE TO INVESTORS: The latest news and updates relating to GEMXX Corp. (OTC: GEMZ) are available in the company’s newsroom at https://ibn.fm/GEMZ
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
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