MG Network

something big isHappening!

In the mean time you can connect with us with via:

Copyright © Money Grows Network | Theme By Gooyaabi Templates

Money Grows Network

Archive

Powered by Blogger.

Welcome To Money Grows Network

Verified By

2006 - 2019 © www.moneygrows.net

Investments in financial products are subject to market risk. Some financial products, such as currency exchange, are highly speculative and any investment should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only.

Popular

Pages

Expert In

Name*


Message*

Gold's first drop in 5 sessions

analytics609b865b11dc2.jpg

On Monday, gold gained 0.3% and skyrocketed to the 3-months high but failed to consolidate at this level. Demand for gold declined amid a slight increase in bond yields to 1.62% on Tuesday, May 11th.

On COME, the price closed at $1,836.10 on Tuesday. As a result, gold fell by 0.1%, or $1.50, from the previous session.

According to Adam Koos from Libertas Wealth Management Group, gold is currently in the bear market amid concerns that the yield may break its last month's high. If so, the precious metal will again be brought under strong pressure.

Meanwhile, US government bonds yields increased early today with the US dollar index following suit. All this has an adverse impact on the price of gold.

At the moment of writing, the greenback grew by 0.24% to 90.35 points relative to the value of the basket of the main currencies. The reading was well above the level of 90.19, the low of 2.5 months. The index plunged to this low on Monday after the release of a disappointing jobs report in the United States.

The weaker US dollar helped gold gain 3.3% last week. However, the bullish trend reversed this week. Early on Wednesday, the precious metal extended losses.

Gold lost 0.3% during early trading hours today. The price dropped by $5.65, settling at $1.830.45. Likewise, silver decreased by 0.61% to $5.56.

analytics609b86fd5dced.jpg

Investors are now focused on US inflation data that is due today. According to preliminary estimates, consumer prices grew to 3.6% year-on-year from 2.6% recorded last month. If the forecast is confirmed, the inflation rate will reach its highest level in 10 years.

A sharp rise in consumer prices in the US and other countries may urge the Fed to change its dovish monetary policy earlier than expected.

If the Federal Reserve increases the interest rate, demand for precious metals will dampen. In such a case, safe havens will be less attractive than bonds since they do not generate profits in the form of coupon payments.

At the same time, an alternative scenario may unfold. At the time of stagflation, when prices approach expected levels but full employment is not achieved, the Fed may continue to adhere to the chosen course and artificially lower interest rates. All this may become the biggest driver for gold.

The material has been provided by InstaForex Company - www.instaforex.com