Gold price today: World gold holds near 3-week bottom
On August 4, the Kitco exchange recorded the world gold price at $1,934.89 per ounce, down $1.41 from the previous session.
This decrease in price was influenced by the strength of the dollar, which also raised concerns about the labor market. Despite Fitch's downgrade of the US sovereign rating, there was little safe-haven demand for gold. Analysts believe the downgrade will have minimal impact on financial markets and is driven more by concerns about fiscal spending and political controversies.
JP Morgan director Jamie Dimon commented that the market is a better indicator of US creditworthiness than Fitch's rating. Ironically, the USD saw some safe-haven demand following the downgrade.
This decrease in price was influenced by the strength of the dollar, which also raised concerns about the labor market. Despite Fitch's downgrade of the US sovereign rating, there was little safe-haven demand for gold. Analysts believe the downgrade will have minimal impact on financial markets and is driven more by concerns about fiscal spending and political controversies.
JP Morgan director Jamie Dimon commented that the market is a better indicator of US creditworthiness than Fitch's rating. Ironically, the USD saw some safe-haven demand following the downgrade.
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The data spurred bets that the Fed would have enough economic room to raise rates further and keep them there - a scenario that bodes well for gold and metals markets. Rising interest rates push up the opportunity cost of holding bullion, while also showing that investors prefer the dollar to a safe-haven over gold.
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The dollar will hold its ground against most major currencies over the next three months, potentially damaging the denominated bullion, according to forex strategists polled by Reuters. dollar.
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The central bank is on track to bring inflation down without causing a recession, said Austan Goolsbee, president of the Chicago Fed. The agency is monitoring the data to assess the possibility of monetary tightening in September.
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The Bank of England is projecting interest rates to a 15-year record high, as inflation remains the highest among the world's major economies.
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According to CME's FedWatch Tool, there is an 83% chance that the Fed will keep rates unchanged at its September meeting. Gold prices are very sensitive to rate hikes. Rising interest rates increase the opportunity cost of holding non-yielding assets like gold.
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Andrew Hunter, vice president of US economics at Capital Economics, said that while economic growth was steady in the first half of 2023, the new data showed plenty of uncertainty going forward.
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Schneider noted that investors should keep an eye on the support at $1,970 per ounce. If the yellow metal slides out of this level, the price can touch 1,930 USD/ounce. If the $1,900 level is broken, gold is likely to fall to $1,850 an ounce.
