Gold is heading for weekly gains despite abandoning the 7-month top By the Arab trader

Gold is heading for weekly gains despite abandoning the 7-month top By the Arab trader
Gold is heading for weekly gains despite abandoning the 7-month top By the Arab trader

© Reuters. Gold is heading for weekly gains, despite abandoning the 7-month high – It is heading to achieve a weekly rise to reach the level of $ 1768 an ounce, compared to $ 1756, an increase of $ 12, despite abandoning the level of $ 1800, the highest level in 7 months, after positive US data over the past two days, whether retail sales rose more than expected at 0.7% today, or unemployment claims fell below 300 thousand for the first time in the pandemic era.

The American returned to the level of 94.02 points, after it remained declining the past two days with the exacerbation of inflation fears, despite the assertion of monetary policy makers in Europe and America that the inflationary pressures are temporary and their causes are not structural, to rise from the level of 93.77 points around which they were traded yesterday.

Calm before the storm at the beginning of the week’s trading?

Gold settled at the beginning of the week’s trading at a level. Supported by the equal balance of risks and stimuli on the macroeconomic front, as gold resisted the rise despite the disappointing non-farm jobs data in the United States, which means that raising interest rates and the dollar receiving support will not likely be in the near future, at the same time, the high US bond yields boosted The attractiveness of the dollar as a safe haven has limited its decline and the appetite for gold.

And the interest of US bonds rose with the Almighty, the voices welcoming the start of the policy of financial normalization and the withdrawal of quantitative stimulus by reducing asset purchases, and this trend was supported by the statements of a number of members of the US Federal Reserve, the latest of which was the statements of the President of the Federal Reserve Board in Ashmond, Thomas Barkin, on Friday, in which he said that he supports reducing the amount of Central Bank Economic Assistance With inflation concerns rising, and with the Fed signaling it may start to roll back its monthly bond purchases, Barkin said this seemed reasonable and was leaning toward starting the process in November, Fed meeting minutes indicated. in September that officials want to start tapering off either next month or in December.

Inflation data pushes gold higher

Gold received enhanced support with the release of US inflation data, which came higher than market expectations and the previous reading, after consumer prices rose 0.4% on a monthly basis, compared to 0.3% for both market expectations and the previous reading, which means that the future of growth may be in danger, especially with the continued The aggravation of the energy crisis and high prices.

John Finney, director of business development at bullion trading company, Guardian Gold Australia, said that the continued rise in inflation at the same pace supports the continuation of gold’s upward journey, which is a completely different situation than it was at the beginning of the year when fears of starting to reduce quantitative stimulus were greater than inflation fears. Supports the dollar and economic growth expectations.

Finney added: “Historically, gold tends to perform very well in an inflationary environment, so it makes sense that the market will turn bullish if inflation continues to rise.

Expectations of gold reaching 1850 dollars

Experts at ANZ Bank have seen that it may rise to the level of $ 1,850 an ounce during the current year, before it begins to suffer next year and beyond.

Experts at the bank pointed out that the factors supporting gold are fading, especially with the approach of the US Federal Reserve to reduce the pace of bond purchases. Despite this, the risks about slowing global economic growth and rising inflation support the rise of gold, especially with the continued low interest.

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