Gold starts a new week holding above $1,800 an ounce after dipping below that key psychological threshold at the end of last week.
With the US celebrating Independence Day, today’s trading volumes are likely to be more muted. The initial signs are for European indices to be making tentative gains with gold experiencing small losses with the typical inverse relationship between these two asset classes returning for today at least.
Live Gold Price – $/oz
Gold’s principal short-term headwind is the strengthening US dollar, which puts downward pressure on all the commodities priced in that currency, including gold.
The dollar’s strength is coming from the Federal Reserve’s aggressive switch in monetary policy with another large interest rate hike expected at the end of this month. Clarity on the Fed’s position will come later this week with the release of the minutes of the Federal Open Market Committee.
In this environment of ever rising interest rates, it is hard to see gold making significant gains but if the precious metal can hold above $1,800 an ounce, then it would demonstrate that there remains significant underlying support for gold.
Which given the ongoing jitters with market confidence amid fears of a recession as well as a war in Ukraine, is entirely understandable.
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