On Thursday, gold prices held steady at over $1,700 as a break in the recent dollar gain reduced some of the pressure on bullion prices and as attention shifted to an impending meeting of the European Central Bank for additional indications. After rising by about 1% on Wednesday, spot gold remained practically flat at $1,717.40.Gold futures increased a little to $1,728.65 after increasing by about 1% the previous session.
As investors anticipated an interest rate increase by the ECB later in the day, the dollar dropped even more from its 20-year highs on Thursday. “The U.S. dollar rise is on hold until the ECB announces its interest rate decision, which is good news for bullion. Gold is shakily maintaining the $1700 level, and that might be put to the test. According to OANDA experts, gold is still susceptible to a significant selloff.
Over the past month, the dollar’s strength and rising U.S. Treasury yields have had a significant negative impact on gold prices as expectations for future, hefty interest rate increases by the Federal Reserve rise in response to solid U.S. economic data and hawkish signals from the central bank. As the Fed started raising rates this year, gold prices have fallen from 2022 highs.
As a result, gold’s returns have lagged behind inflation, raising concerns about the usefulness of the yellow metal as an inflation hedge. Copper prices among industrial metals remained mostly stable after declining the previous day due to mounting worries about the deteriorating economy of China, a key importer. Despite the fact that China’s imports of copper continued to rise in August, according to trade data, investors worry that this pattern may change as the economy continues to deteriorate.
