Gold price today 1-8: Quietly waiting for a breakout

The world gold price continued to increase slightly today due to the tough monetary policy stance of the US Federal Reserve (Fed).

Kevin Grady, President of Phoenix Futures and Options, said that gold prices remained at current levels, despite the reaction to upcoming economic data.

Just a small sign of economic weakness will also support gold prices. In the near term, the gold market will pay attention to the US nonfarm payrolls data for July.

Lukman Otunuga, chief market analyst at FXTM, said the Fed's stance depends on economic data and the Fed wants a cooling of the labor market as a condition for controlling inflation. While gold is particularly sensitive to the jobs report.

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According to technical analysis, PMI falls below 50 points, which means China's manufacturing sector is shrinking.

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According to the National Bureau of Statistics of China, the sector shows weakness in China's manufacturing activity, in addition to the impact of external factors limiting orders, the internal production units still exist. weaknesses, although the Government of this country has lifted measures to prevent the Covid-19 epidemic since January.

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Today, the European Economic Area announced GDP growth in the second quarter of 2023 increased by 0.3%, higher than the forecast of 0.2% and higher than the 0% rate of the first quarter of 2023.

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According to analysts, the European economy has escaped the recession after the previous two quarters of weakness. However, economies in this region still show many concerns, such as persistent inflation, geopolitical tensions, and high interest rates.

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According to analysts, gold prices jumped today as investors moved away from the "greenback" after the European Central Bank (ECB) raised interest rates, helping the euro appreciate against the US dollar.

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Data showing higher economic growth in Europe and a slight softening in inflation, a stronger euro and a weaker dollar have helped strengthen gold, said Carlo Alberto De Casa, market analyst at Kinesis Money. short-term recovery. The risk of a recession and the expectation that central banks will be more dovish next year are the main catalysts supporting gold prices.

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It is only a matter of time before the US Central Bank starts pumping money back into financial markets to keep the economy from falling into recession. When that happens, fear will increase in the market and push gold prices higher.

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According to Shah, if recession fears materialize, gold futures prices will rise. In this scenario, gold can reach $2490/ounce. That number would be 22% above the nominal all-time high (reached in August 2020) and close to that number in real terms. However, it would be 28% below the all-time high reached in 1980.

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In an interview with Kitco News, Juan Carlos Artigas, head of research at WGC, said the banking crisis in May with the collapse of several regional banks in the US had ended demand. gold lining material and coins in North America. He added that the fact that global uncertainty is supporting jewelry sales in key markets like China.

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Gold price went down, but the world's largest gold investment recovery SPDR sold 3.75 tons of gold, the remaining gold holdings were 909.18 tons. However, the world demand for gold in the first 6 months increased 5% to 2,460 tons

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The European Union (EU) has replaced developing countries as the main gold buying markets in the world. In the first months of 2023, the total amount of gold mined also increased 2% from the record number recorded in 2018, to 1,781 tons.

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There are early signs that sentiment is starting to change, Mr. Artigas said. He added that the gold market remains in a wait-and-see mode as the Fed is keeping options open regarding its monetary policy.

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Juan Carlos Artigas, head of research at the WGC World Gold Council, said the banking crisis in May, when several US and European banks collapsed, created an event. Significant risks boost physical gold demand. Global uncertainty is "supporting" strong jewelry sales in key markets such as China.

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According to experts, a stronger USD makes oil prices more expensive. Gold "black" increases and the dollar strengthens, making gold transaction and accommodation costs also expensive. Therefore, investors took profits to reduce costs.

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Tim Waterer, lead market analyst at KCM Trade, said that the US jobs data released later this week will be an important indicator of interest rate adjustments from the Fed and this will affect affect the price of gold.

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The dollar index hit a three-week high, amid a weaker yuan after a private-sector survey showed China's manufacturing activity halted for the first time in three months. stagnant. The dollar and gold often move in opposite directions.

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Any signs of recovery in the labor market will give the US Federal Reserve (Fed) more incentive to continue raising interest rates, which bodes well for gold. Analysts expect payrolls to decline slightly in July, staying close to a relatively high level.