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Gold prices jump to its highest level in 5 months due to the USD decline
Gold Price – 2nd June 2021
Gold prices rose during today’s commodities trading session in the European market, to maintain their strong gains for the third consecutive session, registering their highest levels in five months above the important psychological barrier of $ 1900 an ounce. This increase was supported by the decline of the US dollar against most global currencies and the growth Inflationary pressures, as investors await several important economic data in the United States this week to grasp indications about the extent of the global economic recovery.
Gold prices rise
At 09:40 GMT, gold rose during spot transactions by about 0.5%, to trade the price of an ounce around the level of 1916.25 US dollars, the highest since the eighth of last January, from today’s session opening level at 1907.42 dollars, and early reached the lowest price at 1904.63 dollars per ounce.
Gold also rose in US futures by 0.4%, recording the level of 1913 dollars an ounce.
At the close of yesterday’s trading, the precious metal “gold” gained 0.1% in the second consecutive daily gain, after the US dollar retreated against a basket of currencies.
Over the course of last May’s trading, gold prices were able to achieve a gain of 7.7%, to record their second consecutive monthly gain and the largest monthly gain since July 2020.
This huge monthly rise is mainly attributed to the heavy losses that the US currency recently witnessed against a number of competing currencies, especially in light of the receding prospects of the Federal Reserve (US Central Bank) to tighten monetary policy and raise US interest rates earlier than 2023.
Those possibilities have receded due to the insistence of the Council officials that monetary policy will remain stable, and their assertion that the high levels of inflation in the United States during the current period is temporary.
The USD continues to decline
The USD index decreased during today’s session by 0.1% in the second consecutive daily loss, reflecting the continued selling of the US currency against most other currencies, which currently contributes to supporting the movements of gold prices, which are priced in dollars and the existence of an inverse relationship between them.
In addition, last week’s data showed that consumer prices rose in the United States in April, while the core inflation measure exceeded the Federal Reserve’s 2% target.
Investors will focus this week on important economic readings in the United States, especially the non-farm payroll data due for release on Friday.
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.