Gold Prices Up amid Dollar Weakness
22.02.2024, 11:35

Gold Prices Up amid Dollar Weakness

Gold prices have experienced a 1.0% increase, reaching $2032 per troy ounce this week. This contributes to a solid 2.0% rise since February 15. Despite the vulnerable position of gold, it has shown resilience and growth during this period.

U.S. 10-year Treasuries yields are currently at three-month highs, ranging from 4.31% to 4.33%. Bets on interest rate cuts by the Federal Reserve (Fed) in March and May have declined to 6.5% and 27.5%, respectively. FOMC Minutes released on Wednesday indicated that the Fed is not inclined to ease its monetary policy until there is a clear and steady decline in inflation.

While these factors suggest a downside scenario for gold prices, it's important to note that gold fell to $1984 per ounce on February 13, the lowest level since December 13, 2023. Prices briefly dropped below the support at $2010-2030 but have since recovered, hovering around the $2030 mark within the resistance zone.

The weakness of the U.S. Dollar has contributed to the recovery of gold prices. However, investor sentiment remains skeptical, as evidenced by the eighth consecutive week of outflows from the SPDR Gold Trust (GLD), totaling $111.1 million last week and reaching $2.76 billion since the beginning of 2024.

Geopolitical events in the Middle East or a U.S. government shutdown could potentially drive gold prices higher. However, the likelihood of such scenarios in the near future is uncertain. If a government shutdown is avoided, gold prices may face further downward pressure.

  • Ime: Sergey Rodler
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