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Gold prices are falling below $1700 due to the rise of the US dollar
Gold Prices Outlook – 31st March 2021
Gold prices retreated during today’s trading session Tuesday in the European market, to its lowest level in more than two weeks, to record its second consecutive daily losses, abandoning trading above the important psychological barrier of $ 1,700 an ounce. This decline came as a result of the rise of the US dollar levels supported by the rise. New for US long-term bond yields.
It also puts pressure on prices at the present time, slowing levels of investment demand for the metal as a safe haven, with growing expectations for a rapid recovery of the global economy in light of the remarkable progress of anti-virus vaccination campaigns.
Gold prices continue to decline
At 09:20 GMT, the spot price of gold was down by 1.3% to trade around the level of 1690.84 US dollars an ounce, the lowest since the ninth of March, compared to the opening level at 1712.51 dollars, and early in the session reached the highest price at 1714.39 dollars an ounce.
Gold also fell in US futures by 0.5%, recording a level of 1707.30 dollars an ounce.
At the end of yesterday’s trading, the precious yellow metal “gold” lost 1.1% in the second daily loss during the last three sessions. This decline came as a result of the rise of the US dollar against a number of currencies.
Prices lost more than 6% over the course of last month’s transactions, to record their second consecutive monthly losses, and the largest monthly loss in percentage terms since November 2016, due to the widespread rise in US Treasury bonds yields, which increases the opportunity cost of possessing gold that does not yield Back.
The US dollar continues to rise
The US dollar index rose during today’s session by more than 0.3% to maintain its strong gains for the second consecutive session, thus recording its highest level in more than four months at 93.20 points, reflecting the continued buying of the US currency against a number of major and minor currencies.
The recent rise in US currency levels was supported by the increase in the yields of 10-year US Treasury bonds today. Tuesday, by 3.5%, the fourth consecutive daily gain, bringing the yield close to its highest level in nearly 14 months at a rate of 1.774%.
In addition, what added additional pressure on gold today, the apparent slowdown in the levels of demand for the metal as a safe haven, especially in light of expectations that the initiative of US President “Joe Biden” for infrastructure could boost economic growth in the United States.
We would like to point out that the Democrats had proposed a new stimulus for spending on employment and infrastructure of up to 3 trillion dollars, which will be the main basis for Biden’s program “Rebuilding in shape.
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.
