Euro Bulls Celebrate the First Round of France’s Election
The global reserve currency, the US dollar (UUP), has been stuck in a narrow range for the last few weeks. It formed temporary bottom near 98.30.
After falling to the lowest levels since November 11 on Monday, the US dollar is slightly weaker in the early hours on April 25.
Another important phenomenon that played on the fall of precious metals on Wednesday, April 19, was the upswing of the US dollar.
Since the French elections are right around the corner, investors might start parking their money in safe-haven assets like gold.
Gold and other precious metals increased due to geopolitical tensions around the world. Gold rose ~4.9% during the past 30 trading days.
On its own stage across the Atlantic from the US Fed, the ECB (European Central Bank) has had its own quantitative easing program.
India and China make up 50.0% of the global demand for physical gold. When gold prices fall, physical gold-buying provides support for gold.
Dollar-denominated assets such as gold are influenced by the US dollar’s strength. A strong dollar is negative for gold, and vice versa.
The interest rate is a major factor that determines gold prices because it determines the attractiveness of the investment alternative.
Investors tend to hold gold in their portfolios as insurance against inflation. They want something that doesn’t lose its value.
The US jobs report showed only 98,000 job additions in March 2017. That was much lower than the consensus estimate of 180,000 jobs.
On a 30-day trailing basis, gold, silver, platinum, and palladium have risen 6.8%, 1.7%, 3.3%, and 5.5%, respectively.
On April 13, 2017, gold futures contracts for June expiration were $7.1 higher at $1,285.2 per ounce—the strongest level seen by gold since November 2016.
Platinum was the winning precious metal and rose 2.9% on April 11, ending the day at $966.20 per ounce.
As the markets experienced unrest on Tuesday, April 11, gold touched its five-month high of $1,275.10 per ounce.
As geopolitical risks emerged on the world stage, global stock markets wobbled and experienced selling pressures on Tuesday, April 11, 2017.
The US dollar, depicted by the US dollar index (DXY), dropped 0.31% on Tuesday, April 11, after hitting a nearly four-week high on April 10.
In this series, we’ll study the impact of geopolitical risk on precious metals. We’ll examine their relative movement to volatility, equities, and the US dollar on April 11, 2017.
After breaking a six-day gaining streak on Wednesday, crude oil prices opened lower on April 13 before regaining strength.
After unemployment figures were released on Friday, the chances that the Fed will increase the interest rates on Treasuries have gone up.