ON 19: 48 ET (00: 48 GMT), SPOT GOLD DROPPED BY 0.4% TO 4,126.72 DOLLARS PER OUNCE, WHILE AMERICAN GOLD FUTURES ROSE BY 0.5% TO $4,127.00. AT THE SAME TIME THE PLATINUM FELL 0.4% TO $1,000.00, THE PALLADIUM DROPPED 0.4% TO 1,036.49 DOLLARS AND THE PALLADIUM FUTURES DROPPED DOWN TO 0.6% TO 1,031.75 DOLLARS. US DOLLAR INDEX REACHED 0.1% TO 101.74
Gold recorded an increase of 1.7% on Monday and the previous week went up about 5%, making prices closer to the mark of $4,130. During this time, crude oil prices fell to 92 dollars per barrel, as the markets showed optimism about possible success in the U.S.-Iran peace negotiations after the last week’s intermediate elections, where Democrats made congress possession
This year the gold and oil are generally moved to the opposite direction. Increased energy prices promoted inflation and increased hopes of strict monetary policy, thereby making pressure on gold as it does not give any interest income
The decline in recent oil prices has reduced this pressure to some extent. Gold became cheaper for traders investing in other currencies from the weakening of the dollar, although the US dollar index went a little upward
The potential edge in further prices can be prevented from the inflation concerns of the Federal Reserve. Fed officials have emphasized the need to control the prices, and traders are looking at a higher probability of increasing another interest rate in December
Oston Guolsby, chairman of Richmond Fed Tom Barkin and Chicago Fed, has highlighted the resilience of the US economy and pressures of the inflation continually made, making it possible that the monetary policy has to be restricted or tightened
Findings for Gold traders:
The decline in oil prices and the light weakness in the dollar has supported gold, but the policy and potential rate increase to prevent the inflation of the fed can limit further speed. Traders should keep track of the Fed’s statement and the oil market direction