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USD Rose For the Third Consecutive Day, Gold Prices Were Under Pressure

Summary

The U.S. dollar rose for the third consecutive day on September 8 and hit 92.86 in the intraday session, the highest level since August 27. As U.S. stocks continued their decline and demand for risky assets cooled; the Canadian dollar fell, and the Bank of Canada maintained its key interest rate at a historically low level. , The pace of bond purchases remains unchanged. As the U.S. dollar continued to rise, spot gold fell again, closing at $1,789.26 per ounce. Oil prices rose by more than 1% due to the slow progress of U.S. Gulf oil producers to resume production after Hurricane Ida passed.

On Thursday (September 9), the international gold price stayed near the low point of $1,782.59 per ounce set overnight since August 6, and the strong U.S. dollar pressured gold prices. The Fed may still start the process of reducing bond purchases this year. The gold price looks at $1,757 in the market outlook.


Kitco Metals senior analyst Jim Wyckoff said that to the dismay of those who are bullish on the gold market, despite the rise in risk aversion in the market this week, the gold market is still selling. Concerns about slowing economic growth caused by the Delta variant shook the stock market this week, but the flow of funds into gold was limited by rising bond yields and a stronger U.S. dollar. A stronger U.S. dollar makes it more expensive for investors holding other currencies to buy gold.


The Fed stated in its latest Beige Book on Wednesday that the US economy "slightly slowed down" in August, and people are increasingly worried about the impact of a surge in the number of new cases on the economic recovery.


Societe Generale pointed out in a report that despite low interest rates and high inflation, gold's growth in 2021 is limited, which does not bode well for its prospects. We expect that as investment inflows further decrease, the price of gold will average $1,750 in 2022.


Risk Warning: The above content is for reference only, and does not represent JRFX’s position. JRFX does not assume any form of loss caused by any trading carried out in accordance with this article. Please consult your financial planner for your investment portfolios and manage your own risk.


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