Gold Prices Fall As US Dollar Rises
For gold investors in Asia, the present times are indeed sad and troubling as gold prices continue to fall drastically. The commodity in recent times has been experiencing several dips due to the high volatility of its prices on the market. This recent fall is attributed to the strengthening of the US dollar against gold which has led to losses. Most times, the price of gold is usually determined by the action of the US dollar as the currency often moves inversely to gold. Price actions of other currencies are also strong influencers of gold prices outlook.
Market reports reveal that gold prices fell by about 0.21% to $1,789 which were relatively low. It further dropped to about $1,781, the lowest it has been in two weeks. This is coming just after the weakened US dollar made a significant comeback with its market price. Due to the volatility of the gold market, investors are hopeful that the ECB scheduled for later today would have a positive impact on gold prices. The ECB’s meeting is to decide how quickly they are to begin asset tapering in the region.
However, gold investors are more concerned with the suspension of the proposed tapering by the US Federal Reserve. The asset tapering initially proposed to happen next month has been suspended due to the poor outcome of the job market analysis last week. Such news is hardly comforting for investors in the commodity as the action of the US dollar is one factor that greatly influences the gold market. The US dollar has been largely influenced by the continuous spread of the Coronavirus in the United States thus also reflecting the state of the American economy.
Meanwhile, producers in China are having a hard time with the increasing inflation rate which is presently at about 9%, the highest in thirteen years. For the Asian giant, economic stability is currently a challenge as they also have growing cases of the Delta variant. Economic activities are yet to return to normal even though there are several strategies designed to make it happen. Experts are however hopeful that the country’s economy would experience a form of stability as the inflation rate is expected to fall in the coming months.
Other Precious Metals And Their Outlook
Globally, the platinum market is expected to be in surplus for the remainder of the year even as mine supply rises. The riding mine supply was met with a relatively low investment demand thus resulting in the projection of a market surplus. According to a platinum market forecast, this surplus is expected to last till the end of the year. Amazingly, it’s not only gold whose prices experienced a fall, other precious metals also did. Even with the surplus projection, platinum dropped by 0.4% while silver fell by 0.1% quite contrary to investors’ expectations. Palladium picked up at about 0.2% after dropping its lowest just a day ago.