Gold Prices Surge 1.8% as Safe-Haven Demand Rises Amid Economic Uncertainty
Gold prices surged 1.8% over the past week, closing at $2,909 per ounce, bolstered by weak US job data and uncertainty in trade policies. China’s gold reserves increased, while domestic prices in Egypt also rose. Analysts are optimistic about future price movements, contingent on breaking through resistance levels.
Gold prices experienced a notable surge of 1.8% in the past week, attributed to safe-haven inflows and a disappointing US jobs report that unveiled lower-than-anticipated job growth in February. This development hints at a potential for the Federal Reserve to consider interest rate cuts later this year.
Closing at $2,909 per ounce, gold opened the week at $2,873 per ounce, intermittently peaking at $2,930 per ounce. However, it failed to sustain the momentum necessary to break through this resistance level and reach its recent all-time high of $2,956 per ounce.
The US jobs report indicated that the economy generated 151,000 jobs in February, falling short of market expectations of 160,000. The unemployment rate slightly increased to 4.1%, higher than the predicted 4%. This weakened employment data, along with a notable drop in the US dollar index—registering its largest weekly decline since November 2022—bolstered gold prices.
Moreover, persistent uncertainty surrounding President Biden’s tariff policies has further enhanced gold’s appeal as a safe haven investment and hedge against inflation. Federal Reserve Chair Jerome Powell remarked that the Fed should patiently evaluate the ramifications of President Trump’s policies before making interest rate adjustments, underlining significant changes in trade and regulation.
In February, China augmented its gold reserves to 73.61 million ounces, a rise from 73.45 million ounces in January, marking four consecutive months of increased purchases by its central bank. China’s gold reserves are currently valued at approximately $208.64 billion, an increase from $206.53 billion the previous month. Simultaneously, global gold-backed investment funds reported net inflows of 26.6 tonnes for the week ending February 28, representing five weeks of continued inflows.
Domestic gold prices reflected a similar upward trend last week, influenced by global gold price increases and a rising US dollar against the Egyptian pound. On Saturday, the price of 21k gold in Egypt was recorded at EGP 4,125 per gram, with a slight decrease on Friday, closing at EGP 4,120 per gram.
Looking ahead, global gold prices have shown resilience due to the US dollar’s decline and disappointing jobs data, alongside persistent demand for gold amid ongoing trade policies. As prices remained under the $2,930 resistance, analysts anticipate potential upward movement if gold can maintain levels above $2,900 per ounce, with targets potentially reaching the $2,950 to $2,960 range if a breakthrough is achieved.
In summary, gold prices rose significantly, driven by adverse US employment figures and a weakening dollar, signaling potential interest rate cuts by the Federal Reserve. Both domestic and global markets reflect increasing demand for gold as a safe-haven asset. With gold maintaining levels above $2,900 per ounce, the outlook suggests a possibility for further upward movement in the near term, contingent on overcoming key resistance levels.
Original Source: www.dailynewsegypt.com
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