Gold Closes Higher, With Strong Retreat In Treasury Interest Rates And Dollar Low
August 29 2023 - 2:20PM
IH Market News
The price of gold (CCOM:GOLD) closed with a high in NY and
reached a three-week high on Tuesday, supported by the sharp
decline in Treasury interest rates and the general low of the
dollar, after weak data from the US labor market.
The Jolts report showed that open job openings in the country
are at the lowest level since March 2021, after three consecutive
monthly declines.
The data, plus the drop in American consumer confidence measured
by the Conference Board, raised the bet that the Fed will no longer
touch interest rates this year. On the Comex, the December contract
was up 0.94% to trade at USD1,965.10 a troy ounce.
Investors are now looking to the US Consumer Expenditure Price
Index, which is due out on Thursday, and the Non-Farm Payrolls, on
Friday, for more clues on the path in interest rates.
According to the CME FedWatch tool, traders now see an 86%
chance the Fed will keep rates unchanged at its September meeting,
up from 78% prior to the data.
Higher interest rates increase the opportunity cost of holding
precious metals without yield.
Reflecting the sentiment, SPDR Gold Trust (AMEX:GLD), the
world’s largest gold-backed exchange-traded fund, said its holdings
were up 0.3% on Monday.
“The fact that the price has been recovering since the middle of
last week suggests that the selling pressure exerted by speculative
financial investors has eased,” wrote Carsten Fritsch, an analyst
at Commerzbank, in a note.
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