- Gold futures are approaching record highs again as gold prices rise despite a steady US dollar and rising Treasury yields.
- According to gold trading platforms, prices find support in expectations of Federal Reserve policy and Chinese demand.
- While both gold and silver prices have risen, they may be ready to pull back as they are in overbought territory.
According to the trading, the price of gold rose to a resistance level of $2,422 per ounce before stabilizing around $2,414 per ounce at the time of writing the analysis. In general, gold prices have made weekly gains of 2%, in addition to their annual gains since the beginning of the year, which amounted to about 17%.
In the same performance, silver prices, gold's sister commodity, reached their highest level in three years last week and continue to rise. According to the trading, silver futures rose to $31.295 per ounce. The white metal will enjoy a weekly increase of 10.2% and has risen by more than 30% since the beginning of the year so far.
In general, financial markets ignored the various inflation reports last week and focused on the headline US Consumer Price Index (CPI) reports, which showed a decline in inflation. However, the producer price index and import and export prices rose above economists' expectations. In general, the decline in the consumer price index led investors to bet that the US central bank would become more confident about lowering interest rates. According to the Fed's CME monitoring tool, traders expect two interest rate cuts starting in September.
At the same time, the price of gold is rising as a result of the boost in foreign demand as China and central banks acquire huge amounts of the precious metal. In this regard, demand in China, which has contributed to rising gold prices in recent months, has become more important as the market waits to see if higher gold prices will prompt some central banks to slow down their buying and as outflows from gold ETFs backed by physical gold.
Usually, other factors that hinder gold did not affect prices at the end of last week’s trading. US Treasury bond yields were mostly green in all areas, as the ten-year bond yield rose 4.5 basis points to 4.422%. Also, the two-year bond yield rose 3.4 basis points to 4.825%, while the 30-year bond yield rose 4.4 basis points to 4.562%.
Another market-influencing factor, the US Dollar Index (DXY), a measure of the dollar against a basket of other major currencies, stabilized around 104.50. Overall, DXY has suffered a weekly loss of 0.8%, narrowing its year-to-date jump to 3.1%.
According to the platforms of stock trading companies, Dow added 135 points, closing at a new record high of 40,003, the S&P 500 rose 0.1%, while the Nasdaq ended slightly lower. Obviously, the focus on interest rates and inflation continues to dominate market discussions, as investors closely monitor economic data and statements from US Federal Reserve officials for any changes in interest rate expectations.
Walmart and Caterpillar shares rose 1% and 1.5%, respectively, pushing the Dow Jones Index higher. Reddit shares rose 10% after the company announced a content partnership with OpenAI. On the other hand, Meme shares fell for the third session, with GameStop shares falling by 19.7% and AMC shares falling by 5.2%. Over the past week, the S&P 500 added 1.4% and the Nasdaq advanced 1.9%, both representing the fourth straight week of gains, which would be the first since February. Ultimately, the Dow Jones recorded its fifth positive week in a row, with a gain of 0.9% for the period.
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Gold Price Forecast and Analysis Today:
The continued decline in the price of the US dollar will give the price of gold a strong opportunity to move towards new record levels. Currently, the closest targets for bulls are 2430 and 2465, then the next historical peak of 2500 dollars per ounce. This requires the continued weakness of the US dollar, an increase in global geopolitical tensions, and an increase in central banks’ purchases of gold. Until now, we still prefer to buy gold from every falling level.
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