Gold prices rose in early Wednesday trading, touching a one-month high as European markets opened. Traders remain optimistic that the United States and Iran could reach a peace agreement that would allow the Strait of Hormuz to reopen. This optimism, reflected in lower oil prices, has also prompted investors to scale back expectations that the Federal Reserve will raise interest rates before the end of the year. As a result, the US dollar weakened against most major currencies, benefiting gold due to the inverse relationship between the two assets. Against this backdrop, investors will continue to monitor developments in the Persian Gulf while also turning their attention to this week's US labour market data, culminating in Friday's all-important Non-Farm Payrolls report. Employment figures pointing to a resilient US economy would strengthen the case for tighter monetary policy, supporting the dollar and likely weighing on gold prices. Conversely, weaker-than-expected data would reduce expectations of further interest rate hikes, potentially triggering renewed dollar weakness and providing additional support for the precious metal.
Ricardo Evangelista, ActivTrades
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk. Forecasts are not guarantees. Rates may change. Political risk is unpredictable. Central bank actions may vary. Platforms’ tools do not guarantee success.