Reporter: Anna Suci Perwitasari | Editor: Anna Suci Perwitasari
KONTAN.CO.ID – NEW YORK. Gold prices fell by 1% over the past week and became the first weekly decline in three weeks. The pressure on the yellow price came as the chances of a stimulus deal between Donald Trump’s administration and Democrats waned, which ultimately damaged the appeal of the precious metal as a hedge.
Friday (16/10), the spot gold price closed down 0.5% to US $ 1,899.29 per ounce troi. This sent spot gold prices down 1.61% last week.
Quarter three money, the price of gold futures for December 2020 delivery also fell 1% last week. Given that on Friday, the price of US gold futures was closed at US $ 1,906.40 per barrel.
“With the stimulus deal for this year very uncertain, gold will remain tied to the move in the United States (US) dollar,” said Tai Wong, Head of Base and Precious Metals Derivatives Trading of BMO.
“Meanwhile the sentiment for gold remains bullish without strong short-term boosters. We seem to expect gold to be around US $ 1,900 and could substantially break through the monthly US $ 1,850- US $ 1,950 per ounce range, “continued Wong.
At the end of last week, the US dollar index actually fell 0.2%. However, if taken a week, the greenback is on the path of a weekly advance. This makes it more expensive for investors holding other currencies to buy gold.
On the other hand, a stronger-than-expected US retail sales report lifted market appetite for riskier assets. But on the one hand, factory production unexpectedly fell in September.
Unfinished talks between Democrats and Republicans left investors pessimistic about a potential US stimulus deal before Election Day.
It is predicted that the two parties will not aggressively discuss the problem of stimulus even though the corona virus cases continue to increase and the labor market recovery has stalled.
Even though it returned to weakening this week, the price of gold has surged by around 25% this year. Gold is considered a hedge asset against inflation and currency depreciation amid an unprecedented level of global stimulus.
“With so much risk of events on the horizon, the culmination of which is the US election, we have likely seen the lowest position in gold for the next month or so,” said Jeffrey Halley, Senior Market Analyst OANDA, in a note.
“Gold is likely to shift to the range of US $ 1,900 to US $ 1,975 per troi ounce when the election draws near,” he continued.
Equivalent to three coins with gold, silver fell 3% last week to US $ 24.25 per ounce troi.
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Reporter: Anna Suci Perwitasari
Editor: Anna Suci Perwitasari