Gold prices are trading higher this morning, touching a 12-week high and remaining on course for a third consecutive weekly gain. The precious metal has moved further above $4,500, after the Treasury's decision to increase its buybacks of longer-dated bonds earlier this week triggered a sharp move lower in yields and the dollar, providing fresh momentum for gold. The US Treasury plans to double the size of its purchases of longer-dated bonds to at least $4 billion per operation, providing additional support to the bond market and helping to contain borrowing costs. This dynamic has been positive for gold, as lower yields reduce the opportunity cost of holding the non-yielding precious metal, while a weaker dollar makes it cheaper for buyers using other currencies. However, the scope for further gains may depend on expectations for Federal Reserve monetary policy. The ongoing US-Iran conflict and reduced hopes of a diplomatic breakthrough continue to support higher oil prices, raising concerns that elevated energy costs could keep inflationary pressures alive and strengthen the case for higher interest rates.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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.