Gold prices went up on Monday, reaching $2,338 for each ounce. This increase happened because the US Dollar became weaker. Gold is usually priced and traded in US Dollars.
The US Dollar lost its value because there was a lot of selling happening. It’s said that the Japanese government might be selling US Dollars to buy Japanese Yen. They’re doing this to make their own currency stronger.
Gold Prices Drop Due to Expectations About Interest Rates
The price of gold is not going up or down much right now. Earlier in April, it fell from its highest point of $2,430. This drop happened when people realized that interest rates in the United States would stay high for a while.
When interest rates are high, it means you can make more money just by keeping your cash instead of investing in things like gold, which doesn’t earn any interest. So, gold became less appealing to investors.
Because prices keep going up a lot in the US, the people who decide about interest rates are changing their plans. Before, they thought they would lower interest rates three times by a little bit in 2024. Now, they’re only expected to do it once or maybe just halfway. This change is because prices are still going up a lot.
We’ll know more about what they decide when they meet on Wednesday. But until then, the price of gold might not change much.
TD Securities Predicts Temporary Drop in Gold Prices Followed by Recovery
The price of gold might go down for a little while if the economy keeps doing well and prices keep going up. But analysts at TD Securities, a bank that helps people invest their money, think this won’t last long. They believe that by the autumn (the fall season), when the weather starts to change, things might turn around.
Bart Melek, who leads the team that studies commodities like gold at TD Securities, says that if there’s disappointing news or surprises in the economy, investors might become interested in gold again by the autumn.
He also says that once people in the Western countries, like the US and Europe, start buying gold again and if China also buys a lot, the price of gold could go even higher than before. According to Melek, reaching a target of over $2,500 for an ounce of gold could be possible in this situation.
Analyzing Trends: Gold Price Takes a Step Back Despite Overall Upward Movement
Looking at the 4-hour chart that experts use to check short-term trends, the gold price is showing a bit of a mixed picture.
On one hand, there’s been a drop in price since April 19, and this could continue a bit more. It might follow a pattern where it goes down, then up a bit, then down again.
But if the price goes above $2,353 and some lines on the chart, it could mean things are getting better for gold. Then it might go up to $2,400.
If it goes below $2,290, though, it could mean more drops are coming, with targets at $2,267 and $2,243.
There’s a thing called MACD that shows momentum, and it’s showing some green bars, but it’s not really high yet, so things are kind of neutral or just a bit positive.
Overall, though, the trend for gold looks good in the medium and long term, which is good news for people who think it will go up.
