Gold Trends Up as Markets Sputter

Wednesday, 5 July at 3:00 pm CST | 

Gold Trends Up as Markets Sputters

Gold is up after the Fourth of July following a bearish decline in the previous week.

The precious metal had approached a key psychological support at $1,900 following the prospect of increased interest rates from the Federal Reserve. Fed Reserve Chair Jerome Powell had commented that the U.S. economy remains “quite resilient” and that slower interest rate increases might be likely.

Prices briefly trended above $1,933 briefly this morning, a week-long high. 

It would be irresponsible to call this a sign of a gold bull run yet. The market is historically volatile, and industry experts say it would require quite a bit more work for bulls to secure a technical advantage. Still, it might mark a departure from the bearish decline of last week. 

Anxieties about US-China relations also suggest slowed global economic growth, which might add fuel to gold’s bullish run and keep the precious metal from once again falling below that key $1,900 support. 

Will Gold Trend Up to a Bullish Run? 

Some gold bulls are optimistic that the tides may be turning for gold’s spot price. 

Recent bearish trends surrounded rumors that the Fed will continue to raise interest rates to combat the threat of inflation. But according to TD Securities, data trends suggest that the Fed’s “warpath against inflation” is likely to soften in coming months. For gold bulls, this is excellent news. 

Gold traders are still anticipating detailed minutes from the Fed’s latest meeting, which are likely to provide a better explanation of the bank’s tightening monetary policies and climbing interest rates. We should have a better idea of whether the latest gold correction spells a positive trend – or just a brief reprise from the gloomy outlook of the past week – after these notes are made public. 

Soft China Data Suggests Weak Global Outlook

Reuters reports that China’s report on services activity suggests that the country’s economic growth may be slowing. The country had outperformed expectations in the first quarter of the year, but increased youth unemployment rates and diminishing foreign demand suggest a gloomier outlook for the world’s second-biggest economy. 

Inflation rates in the economy have remained stagnant, but input costs have decreased while service provider charges increased marginally. Not all experts have a pessimistic outlook; Chinese economist Ting Lu remarked that the next half of 2023 might involve a resurgence of previous economic growth trends.

Jittering US-China relations also impact rising gold prices. Janet Yellen, Treasury Secretary for the United States, is in China this week and plans to jumpstart discussions with China’s Ambassador. The New York Times reports that Yellen’s main objective is to ease tensions between the two world powers. Most notably, tariffs from the Trump administration remain in effect, and President Biden considers additional blocks on Chinese AI tech.

Along with current economic tensions, rhetoric between Xi and Biden has become increasingly volatile, suggesting a potential revival of Trump-era trade wars between the United States and China. 

Investors Eye Key Indicators as Market Bounces

Gold investors are watching the news closely. Both the outcome of Yellen’s negotiations with China and the Fed’s meeting minutes concerning rising interest rates are likely to impact the price action for gold bullion. Prices have rebounded from month-long lows after initial evidence of a robust U.S. economic outlook spooked gold speculators late last week. 

 It remains impossible to predict precise price movements, especially until we know more about where the dust will settle amid Fed meetings and diplomatic negotiations between Yellen and China. Monaj Kumar Jain works with Prithvifinmart Commodity Research and remarked on what he views as a volatile outlook for gold prices later this week. He remarked in an article for Indian news source Gold Price today that he anticipates that prices will “remain shaky” until we receive more news. 

International Gold Finds Support Levels between $1914 and $1904, Faces Resistance at $1940-1955: Prithvi Finmart #comex #gold #goldprices @ManojKjain1975 @AnujGuptaTA @kediaadvisory @MotilalOswalLtd @NirmalBang https://t.co/s1PLXSCfR5

— gold price today news (@today_gold) July 4, 2023

Stay Updated with the Latest in Gold Price News

Hero Bullion is keeping up with the latest breaking news in the gold market. Collectors of bullion products should carefully follow the sector before putting their money on gold, silver, and platinum products. 

Will gold continue to appreciate amid volatile global economic conditions? Like most investors, we’re unsure of where prices will fall. As the Fed deliberates increasing interest rates and Yellen tries to put out the fire of worsening China-U.S. relations, expect gold to remain volatile over the next week.