The ounce of gold in euros records losses at European noon after opening Tuesday’s day reaching a maximum not seen since May 23.
The Xau/EUR closed Monday at 2,956.17, winning a forceful 1.92% daily.
This Tuesday, the price of gold in euros has opened the Asian session rising at maximum eleven days at 2,963.19 but subsequently has been giving ground, falling into the European opening to a minimum daily at 2,932.93.
The Xau/EUR quotes when writing about 2,945.05, losing 0.38% in what we have been working on.
From one year to this part, the price of gold in euros has gained 36.91%.
What factors have influenced the price of gold in recent hours?
- The caution continues to dominate the markets, promoting the price of gold compared to the euro at the beginning of the day, although in the last hours it records losses regarding the opening.
- The investors remain alert to lack of understanding between the United States and China Waiting for the phone call that the presidents of both countries, Donald Trump and Xi Jinping will maintain this week.
- The Tariff war continues, supporting the price of gold as a safe refuge. The euro is harmed by the lack of agreement between the European Union and the United Statesafter Trump will delay the application of tariffs of 50% to the Eurozone products on July 9 to try to reach a consensus.
- The Moderation of harmonized inflation of the Eurozone limits a more pronounced rise in the euro against the OROr, since it gives reasons to the European Central Bank to cut your rates at the meeting next Thursday. The annual IAPC has risen 1.9% in the preliminary reading of May, below the previous 2.2% and 2% expected. The underlying inflation has stood at 2.3%, below the previous 2.7% and the planned 2.5%.
- Ukraine and Russia agreed to exchange prisoners under 25 years and also injured and serious diseases After the meeting between both parties held yesterday in Istanbul.
- Nearly 30 Palestinians have been killed by Israeli troops while waiting for a food cast in the south of the Gaza Strip. The climb continues in the region linked to geopolitical risks by the Russian occupation of Ukraine limits any significant fall in gold prices.
FAQS GOLD
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.
