Gold prices continued to decline on the global market today, August 18th, moving further away from the $1,900 per ounce mark and trading at a low of $1894.08 per ounce.
The gold market continues its downward trend, reaching near its lowest level in five months. According to a report from the US Department of Labor, weekly unemployment claims decreased by 11,000 to 239,000. While this data provides limited information about the health of the economy and does not provide clear direction for gold's future path.
Trading on the market has seen a significant decrease with investors feeling apprehensive. The world's largest gold exchange-traded fund (ETF), SPDR Gold Trust, reduced its gold reserves to their lowest level since January 2020.
Overall economic conditions seem better compared to three months ago. Inflation appears to be decreasing as desired by the Federal Reserve (Fed). In this context, demand for safe-haven assets like gold is expected to decrease.
The gold market continues its downward trend, reaching near its lowest level in five months. According to a report from the US Department of Labor, weekly unemployment claims decreased by 11,000 to 239,000. While this data provides limited information about the health of the economy and does not provide clear direction for gold's future path.
Trading on the market has seen a significant decrease with investors feeling apprehensive. The world's largest gold exchange-traded fund (ETF), SPDR Gold Trust, reduced its gold reserves to their lowest level since January 2020.
Overall economic conditions seem better compared to three months ago. Inflation appears to be decreasing as desired by the Federal Reserve (Fed). In this context, demand for safe-haven assets like gold is expected to decrease.
Comment:
The prospect of higher US interest rates does not bode well for gold, as it increases the opportunity cost of holding non-yielding assets. This sentiment has weighed heavily on gold since 2022 and is expected to continue until the Fed decides to start cutting rates.
Comment:
Fed policymakers have agreed that uncertainty remains high and that future interest rate decisions will depend on "total" data coming in the "coming months".
Comment:
Most members of the Fed's Federal Open Committee of Mayors (FOMC) worry the war on usage is far from over, the minutes of the newly released meeting show. They emphasized that the FOMC can continue to tighten monetary policy.
Comment:
Financial investors are gradually shifting their capital from safe-haven assets like gold towards investments in production and business sectors or other profitable assets. As a result, gold has lost its prominence in the market.
