Gold Outlook: Gold price is at its lowest level in 6 weeks

Mohammed Abdelkhalik
September 22, 2020

Ad Disclosure

Gold Price: 23rd September 2020

Gold price retreated in the European market on Tuesday to continue its losses for the second consecutive day, approaching the six-week low recorded earlier in yesterday’s trading, as prices are still under pressure from the strong rise of the US currency against a basket of global currencies, ahead of the President Federal Reserve testimony “Jerome Powell” before the US Congress.

Gold price fell by 0.9% to $ 1,894.72, from today’s opening level of $ 1,912.35, and reached the highest level at $ 1,920.02.

Gold ended yesterday’s trading on CFD platforms such as Pepperstone, down by 2.0%, with the biggest daily loss since last August 19, and reached a six-week low of $ 1,882.23 an ounce.

Gold price - 23rd September 2020

The dollar index rose on Tuesday by 0.4%, extending its gains for the third day in a row, recording its highest level in about a month and a half at 93.89 points, reflecting the continued strong rise in the levels of the greenback against a basket of major and minor currencies.

Gold price rose after the USD increasing

This rise comes in light of the acceleration of purchases of the US currency as the best alternative investment, due to the renewed escalation of concerns about the global economy, after the increase in new cases of Coronavirus in Europe and the United States.

This rise is also supported by the operations of securing the safety of the US dollar liquidity, in light of the sharp selling wave that dominates most of the global stock markets, and in light of fears of closing global economies again, in addition to the delay in approving new financial and monetary stimulus in the United States.

By 14:30 GMT, Federal Reserve Chairman Jerome Powell will testify before the House Financial Services Committee in Washington, DC, about the expected economic effects of the Coronavirus pandemic.

And Powell unveiled at the Jackson Hole Economic Conference about an important shift in US monetary policy towards bearing the largest amount of inflation in order to push the US economy to recover quickly from the Coronavirus crisis.

Gold holdings of the SPDR Gold Trust, the largest global index fund backed by gold, increased yesterday by 18.98 metric tons, in the second consecutive daily increase, and by the largest daily increase since June 19, bringing the total to 1,278.98 metric tons.

Author Mohammed Abdelkhalik

Professional Trader and Analyst, economist in Financial and Forex market since 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.