06.02.2023 03:09 PM
Gold advances amid upsurge in precious metal market

This image is no longer relevant

Gold began this week in positive territory, recouping the losses it had sustained at the end of last week.

Early on Monday, the precious metal gained 1% and rose to $1,890 per ounce, with the key level of $1,900 now in sight.

Gold futures for April delivery rose 0.74%, or $13.8 this morning on the Comex in New York, advancing to $1,890.4 per ounce. Silver futures for March delivery gained 0.48% and hit $22.512 per ounce.

This image is no longer relevant

The current upswing overturned the losses which occurred during the last trading session of the previous week. On Friday, precious metals performed a significant downward correction. Gold dropped by 2.8% amid the release of another batch of statistic data in the United States. The precious metal was sent downwards largely by US unemployment data. The unemployment rate fell to 3.4% from 3.5% in December. At the same time, non-farm payrolls rose by 517,000, well exceeding the forecasted increase of 185,000. It is noteworthy that such a significant growth was a surprise to most experts, who had never expected a jump of more than 185 thousand.

The US dollar advanced thanks to positive macroeconomic data, with USDX immediately gaining 1.14% against the basket of the six major currencies of the world and reaching 102.92. Usually, a stronger dollar would likely weigh down on the precious metals market. However, in the current situation not even this negative factor can keep gold away from breaking above the key level of $1,900 per ounce.

The overall trend in the precious metals market has been quite positive over the past few months. In November, gold began to swing strongly. The rally was so significant that few experts made long-term outlooks for gold. The precious metal fluctuated between $1,640 and $1,945 per ounce, moving by more than 18%. Now, the situation has stabilized to such an extent that gold might begin the biggest rally in three years. At the end of summer of 2020, the precious metal hit its all-time high. Then cost reached $2,075.14 dollars per ounce. The current situation makes even a breakthrough above this level possible.

There are two reasons for the unprecedented optimism in the precious metals market.

- Firstly, demand for gold by central banks around the world has increased. Especially strong this demand was expressed by the People's Bank of China. The quite low price of gold at that moment contributed to it.

- Secondly, gold and foreign currency reserves of the United States continued to decrease due to the debt liabilities of the US Treasury Department.

The world's central banks expanded their gold reserves quite substantially last year. Gold reserves have increased by 1136 tons, equivalent in value to about $70 billion. It has been the biggest purchase of the precious metal since 1967.

In addition, the demand for the precious metal in 2022 went up by 18% compared to the previous year. In 2022, gold sales reached 4,741 tons, hitting the highest level in 11 years.

All of this combined has bolstered the precious metals market, giving hope to market participants. However, it should be noted that a massive upsurge is always followed by either stagnation or a pullback. As long as there are no significant reasons for gold to decline, it may very well hit a high of $2,000 per ounce.

Maria Shablon,
ผู้เชี่ยวชาญด้านการวิเคราะห์ของ InstaForex
© 2007-2023
Euro vs US Dollar
Select timeframe
Start trade
Start trade
  • Grand Choice
    Contest by
    InstaForex always strives to help you
    fulfill your biggest dreams.
  • Chancy Deposit
    ฝากเงินในบัญชีของคุณใน $3,000 และรับ $8000 ไปเพิ่ม!
    ใน มีนาคม ทางเราได้ออก$8000 ภายในแคมเปญ Chancy Deposit !
    คว้าโอกาสที่จะชนะด้วยการฝากเงิน $3,000 ไปในบัญชีเทรด เมื่อทำตามเงื่อนไขนี้แล้ว คุณก็จะกลายเป็นผู้เข้าร่วมแคมเปญ
  • เทรดให้ดีแล้วคว้ารางวัล
    เติมเงินในบัญชีของคุณอย่างน้อย $500 สมัครเข้าร่วมการแข่งขัน และลุ้นรับรางวัลอุปกรณ์ติดต่อสื่อสารแบบพกพา
  • โบนัส 100%
    โอกาสพิเศษของคุณในการรับโบนัส 100% จากเงินฝากของคุณ
  • โบนัส 55%
    สมัครรับโบนัส 55% สำหรับการฝากทุกครั้ง
  • โบนัส 30%
    รับโบนัส 30% ทุกครั้งที่คุณเติมเงินในบัญชีของคุณ

Recommended Stories

USD/JPY hit by pessimism

USD/JPY continues to slide down, hitting the 1.5-month low of 130.2 early on Friday. Analysts warn that the US dollar's losing streak could continue for quite some time

Аlena Ivannitskaya 09:34 2023-03-24 UTC+2

Asian stocks mostly negative

On Wednesday, the US central bank held a two-day meeting and this had an impact on all world stock indices. Major Asian stock markets fell for the most part

22:38 2023-03-23 UTC+2

The pound's "smile" is the opposite of the dollar's smirk. GBP on the rise

The British currency experienced a stellar hour at one point, surging after rising consumer inflation in the UK and the Fed's decision on the key rate. However, experts fear that

Larisa Kolesnikova 09:28 2023-03-23 UTC+2

EUR/USD: Euro's rally to stop at any moment

While the euro continues to gain ground, the US dollar has not given up yet. EUR/USD closed the session on Tuesday in positive territory near 1.0765 for the fourth

Viktor Isakov 07:55 2023-03-23 UTC+2

US stock market closed lower, Dow Jones down 1.63%

At the close on the New York Stock Exchange, the Dow Jones fell 1.63%, the S&P 500 fell 1.65%, and the NASDAQ Composite index fell 1.60%. Procter & Gamble Company

Thomas Frank 03:17 2023-03-23 UTC+2

EUR/USD: Fed struggling to stop market panic while USD waiting for verdict

The US dollar dropped for the third day in a row on Monday. At the close of yesterday's session, USDX lost about 0.4%, falling below 103 for the first time

Viktor Isakov 07:54 2023-03-22 UTC+2

US stocks close higher, Dow Jones gains 0.98%

At the close of the New York Stock Exchange, the Dow Jones rose 0.98%, the S&P 500 rose 1.30%, and the NASDAQ Composite rose 1.58%. Leading US stock indexes

Thomas Frank 04:16 2023-03-22 UTC+2

The dollar and financial stress: the main thing is to get up after a knockout

The US currency has to defend its position, the loss of which threatens its stability. However, USD values are still volatile as the greenback confronts serious financial stress that

Larisa Kolesnikova 08:23 2023-03-21 UTC+2

EUR/USD: Investors assess Fed's efforts to calm market turmoil

In the previous week, the greenback fell by about 0.7% against its main competitors, including the euro. The US dollar was fluctuating wildly as investors revised their expectations regarding

Viktor Isakov 08:20 2023-03-21 UTC+2

US stock market closes higher, Dow Jones gains 1.20%

At the close on the New York Stock Exchange, the Dow Jones rose 1.20%, the S&P 500 index rose 0.89%, the NASDAQ Composite index rose 0.39%. The US Federal Reserve

Thomas Frank 03:25 2023-03-21 UTC+2
ระบุคำถามไว้ได้ใน แชท.