Gold: а review of the market situation

Gold moderately cheaper today, departing seven-week high, due to the strengthening of the US dollar and the rise in global stock markets. Meanwhile, a further fall in prices is constrained by uncertainty about the timing of interest rate hikes in the United States, which intensified after weak employment data.

Recall stronger US dollar is putting pressure on gold, as reduces the metal's appeal as an alternative asset and makes dollar-denominated commodities more expensive for buyers in other currencies. Meanwhile, the delay in raising interest rates contribute to the demand for gold, as it reduces the relative cost of metal retention by ensuring increased profits for investors.

"Gold is likely to continue to depend on the dynamics of the dollar and expectations of rising interest rates in the United States - said analyst ActivTrades Carlo Alberto de Casa. - The next support levels are at $ 1,192 and then $ 1,182."

Meanwhile, an analyst at ANZ Bank Tianpiriya Victor said: "We have not changed expectations about raising the key rate US Federal Reserve in the middle of this year, but Friday's weak data indicate that the rate will be increased rather later than sooner." In addition, experts expect the price of gold will fall to $ 1,100 an ounce by the end of June under pressure from stronger dollar.

As for the situation in the physical market, the Asian demand for the precious metal remains weak at present value. Award at the Shanghai Gold Exchange has fallen below $ 1 per ounce to the spot price in London compared with about $ 2- $ 3 last week, as Chinese buyers returned to the market after the holidays.

May futures for gold on the COMEX today fell to 1213.00 dollars per ounce.