Gold prices fall as the US dollar rises

  • 03 February, 2022
  • 2:18 pm EET

Gold prices fell in trading today, Thursday, and hovered near the highest level in the previous session.

The decline in the yellow metal comes as the US dollar regains strength ahead of central bank meetings in Britain and Europe as their economies grapple with rising inflation risks.


Gold Prices Today

The price of gold futures contracts – April delivery – decreased by 0.29%; To reach the level of 1805 dollars an ounce.

The price of spot delivery of the yellow metal also fell by 0.26%, to record $1802.67 an ounce.

At the same time, the price of silver futures contracts – for March delivery – decreased by 0.74%, recording $22.44 an ounce.

While the spot platinum price decreased by 1.18%, recording $ 1027.02 an ounce, while the spot palladium price fell by 0.18%, to record the level of $2,365.25 an ounce.


Interest Rates

“Interest rate expectations are the primary driver for gold at the moment,” said Kyle Rhoda, analyst at IG Markets.

“There has been some delay for gold in recent days from some of the comments from a handful of Fed speakers, who have played down some of the concerns about aggressive tightening,” he added.

While the US Federal Reserve is expected to raise interest rates in March, policymakers spoke cautiously this week about what might follow; Given the uncertain outlook for inflation; Where the pandemic hits business.

Gold is a hedge against inflation, but it may see demand affected by higher rates as a non-interest-paying asset.


Inflation Crisis

ANZ wrote in a note that higher inflation is pushing real rates further into negative territory, and this broadly protects gold’s downside in the short term, Reuters reported.

Markets are expecting the BoE to raise interest rates again and signal a further rollback of pandemic stimulus later in the day, while the European Central Bank prepares to keep policy unchanged, but acknowledges rising inflation.

The dollar index strengthened against its rivals; This limited the demand for bullion priced in dollars among buyers holding other currencies.

“There is currently a very high correlation between the movement of the US dollar and the direction of gold prices with little impact on prices over the past few trading sessions,” said Michael Langford, director of corporate advisory firm AirGed, who expects gold to continue to move at $1,800 an ounce.


American Jobs

US data showed today, that the private sector in the United States lost 301 thousand jobs during January, contrary to analyst expectations, with the repercussions of the Omicron mutator.

Investors are waiting for the non-farm payrolls report to be released by the US Department of Labor on Friday



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