He Price of gold in euros yields land after three consecutive days of profitsclosing Monday around € 2,915, with a 0.52% rise in the day.
This Tuesday, the ounce of gold in euros has reached a maximum of thirteen days in € 2,924.94 during the Asian session, but in the last hour it has fallen to a minimum daily in € 2,903.
The XAU/EUR quote at the time of writing about € 2,904, losing 0.38% daily.
From one year to this part, the price of gold in euros has risen 33.21%
The improvement of the services sector in the Eurozone, Germany, Italy and Spain favors the euro
- During the morning of Tuesday, the figures of the PMI of services of the Eurozone countries have been revealed, showing positive results in much of them and favoring the increase of the euro against gold. Spanish indicator has risen to 55.1 in July From 51.9, improving the 52.5 points expected by the market. The Italian PMI has also improved 52.3 since 52.1, and although it has not achieved the 52.5 expected points, it shows a consolidation in the expansion of the sector. He German indicator has jumped at 50.6 points from 49.7, exceeding 50.1 expectations and reaching its highest score in four months. Finally, the Eurozone index increased from 50.5 registered in June to 51.0 in July, indicating a faster expansion rate of the activity of the services sector since last March.
- On the other hand, tension in the Middle East and concerns about tariffs limit the fall in the price of gold as an active refuge. Before the increase in external and internal pressure to end the war in Gaza, Benjamin Netanyahu has responded by ensuring that its goal is to occupy the entire strip. In Europe, the European Union has postponed for six months the application of retaliation tariffs against the United Stateswaiting to reach an agreement that improves the current one in that period of time.
GOLD – FREQUENT QUESTIONS
Gold has played a fundamental role in the history of mankind, since it has been widely used as a deposit of value and a half of exchange. At present, apart from its brightness and use for jewelry, precious metal is considered an active refuge, which means that it is considered a good investment in turbulent times. Gold is also considered a coverage against inflation and depreciation of currencies, since it does not depend on any specific issuer or government.
Central banks are the greatest gold holders. In their objective of supporting their currencies in turbulent times, central banks tend to diversify their reserves and buy gold to improve the perception of strength of the economy and currency. High gold reserves can be a source of trust for the solvency of a country. Central banks added 1,136 tons of gold worth 70,000 million to their reservations in 2022, according to data from the World Gold Council. It is the largest annual purchase since there are records. The central banks of emerging economies such as China, India and Türkiye are rapidly increasing their gold reserves.
Gold has a reverse correlation with the US dollar and US Treasury bonds, which are the main reserve and shelter assets. When the dollar depreciates, the price of gold tends to rise, which allows investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rebound in the stock market tends to weaken the price of gold, while mass sales in higher risk markets tend to favor precious metal.
The price of gold can move due to a wide range of factors. Geopolitical instability or fear of a deep recession can cause the price of gold to rise rapidly due to its condition of active refuge. As an asset without yield, the price of gold tends to rise when interest rates lower, while the money increases to the yellow metal. Even so, most movements depend on how the US dollar (USD) behaves, since the asset is quoted in dollars (Xau/USD). A strong dollar tends to keep the price of gold controlled, while a weakest dollar probably thrusts gold prices.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
