The precious metal’s price climbs at last Tuesday’s closing. Gold is nearing a 2 week high in the previous session after the Japanese inflation data continues to weaken. London’s, Australia’s, and New Zealand’s market are still close due to the holiday weekend, while United States traders are still returning due to the Christmas break making trading a bit more thinly.
The price of spot gold sees an increase by 0.5 percent and is currently trading at $1,143.98 per ounce. While gold is getting back up and sees a better closing on Tuesday since Dec 14, it is trading at $1.148.98, while a decent cousin, the U.S. gold, also received an increase of 0.5 percent as well and is trading at $1,144.50 per ounce. The increase spells a stronger U.S. economy and analysts see this as an opportunity to bring inflation in the New Year.
The dollar has been surging nonstop, bring precious metals tumbling down, and overtaking every currency in the past weeks or so. The stronger greenback and the Federal Reserve announcement of bumping up the rates have recently put the price on metals to a 7 straight week loss until last Friday.
Analysts have noted that some possible agents that can make the gold’s growth prevalent till 2017 are; the broad concern of the European banks and looming scandals they have coupled with the stiffening Brexit aftershocks, and the uncertainty the President-elect Donald Trump policies and its government pose in the near future. But due to the Fed’s announcements, the possibility of the stronger U.S bond yields could spell a possible hindrance for gold’s 2017 silver lining.
Dollar Growth Uncertain under Trump’s Govt
Senior commodities broker at RJO Futures in Chicago said, “Maybe a top is in on Japan’s growth and with that you could start to see stimulus measures and that’s why gold and silver ticked up,” Japan is seeing a drop in its core consumer prices in annual terms for the ninth month as household spending are plummeting. While China’s industry are recording a stronger profit growth in the last 3 month in November, making the second largest economy gaining its ground and gradually improving.
The U.S. currency has been in a really good place this past week and surging over other currency to a 14-year high and is closing to parity with euro. The steady growth of the dollar and the Fed’s decision to bump up rate hikes next year are curbing demands for commodities prices by making them more expensive for holders of other currencies.
According to the Tokyo-based Standard Bank’s head of commodity trading Yuichi Ikemizu, “People are waiting until Trump becomes the U.S. president and until we see his real policies or what he will do when he takes office,”Ikemizu also added that the majority of them are observing other markets like dollar and stock markets, the upcoming Trump government builds a good expectations for the stock market and financial market. If that will be the case people won’t be needing any gold and instead invest in stocks.
Gold is going to have a problematic 2017 if the surge of the dollar continuous, the precious metal would be priced in the U.S. currency and becomes more expensive to foreign buyers when the dollar increases. Meanwhile, silver increased 1.5 percent at $15.99 a troy ounce, platinum was also up by 1.2 percent at $905.90 a troy ounce and lastly palladium also received an increase of 2.9 percent at $673.80 a troy ounce.
Tired of being outdated and left behind of the latest financial and market news? Follow us at Options12 for the round-the-clock updates of news about online trading, forex, commodity, economies, and automobile. Don’t get left behind, subscribed now for you daily news updates and be informed!