As the dollar weakens, gold prices are rising
3 August 19:10
Gold Rises on Monday, August 3: The dollar weakened, and optimism over a possible deal between the U.S. and Iran pushed oil prices lower, easing inflation fears and expectations that the Fed would keep interest rates high for an extended period. This was reported by "Komersant Ukrainian", citing Reuters.
The spot price of gold rose 0.24% to $4,050.59 per troy ounce. The precious metal posted its first monthly gain in five months in July, rising by about 1%.
Oil prices fell after U.S. President Donald Trump refrained from launching a new attack on Iran in the hope of quickly reaching an agreement that would put an end to Tehran’s nuclear ambitions and allow the Strait of Hormuz to be reopened.
Trump said that negotiations with Iran would take place on Monday, but declined to set a deadline for reaching an agreement.
“We’ve returned to the previous correlation: gold rises when oil prices fall, and falls when oil prices rise… Today, lower oil prices are slightly dampening expectations of a U.S. interest rate hike this year and are providing support for gold,” said UBS analyst Giovanni Staunovo.
Gold received additional support from a weaker dollar, which fell to its lowest level since mid-June following currency intervention to prop up the yen, as well as a decline in yields on 10-year U.S. Treasury bonds.
U.S. labor market data will also be the focus of the market this week.
“A weaker U.S. labor market will allow the Fed to keep rates at their current level this year, which will be positive for gold, as the market has already priced out the likelihood of a rate hike this year,” said Staunovo.
Palladium fell 0.03% to $1,273.54 per ounce, while silver rose 0.6% to $57.98 per ounce. The price of platinum rose 0.1% to $1,643.72.
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