Gold: а review of the market situation

Gold prices retreated from a session high, and returned to the levels of the opening, which is associated with the strengthening of the dollar in response to strong US statistics.

The US currency showed mixed trends against the euro and the yen. As a result, gold briefly reached its highest level since March 6, 2015 - $ 1,194.5. "The dollar remains the main factor that affects the price of gold. Traders will closely follow the comments by the Fed to get hints about the timing of rate increases," - said the expert Naeem Aslam AvaTrade.

Today the head of the Federal Reserve Bank of St. Louis James Bullard said that zero interest rates are no longer suited the US economy, given the decline in the unemployment rate and the prospect of enhanced economic growth. Bullard said he expects the economic recovery in the 2nd quarter after a weak start to the year, as lower gasoline prices have supported consumer spending. He added that an early rate hike will help ensure that future Fed does not collide with the need to improve their faster to limit inflation. "If we do not begin to normalize policy now, two years later, we are very far behind," - he said.

At the same time on Monday, Deputy Chairman of the US Federal Reserve, Stanley Fischer, said that the rate may be increased in case of further improvement in the labor market, as well as sufficient confidence in the Fed that inflation will approach the target of 2%.

As for today's statistics, the Labor Department said that consumer prices in the US have resumed a modest rise last month after declining most of the winter, but core inflation remains weak against the backdrop of sluggish economic growth. The consumer price index, which reflects the fact that Americans pay for everything from food to medical care, increased a seasonally adjusted 0.2% in February compared with a month earlier. It was the first increase since October and the largest increase since June. With the exception of volatile food prices and energy prices, core prices also rose by 0.2%. Economists had expected growth of 0.2% of the total price and the increase in core prices by 0.1%.

Meanwhile, another report showed that new home sales rose to the highest level in the last seven years in February, becoming a sign of high demand, which can help improve the broader housing market in the United States. Sales of newly built, single-family homes rose by 7.8% compared to the previous month and reached a seasonally adjusted annual rate of 539,000, the Commerce Department said. This is the highest level since February 2008. Economists had expected sales to fall to 472 000. The figures for the previous month was revised up to 500,000 from the level of the initial value of 481 000. The sales are not recorded above $ 500,000, since the spring of 2008.

May futures for gold on the COMEX today rose by $ 1.3 - up to 1189.30 dollars per ounce.