He Gold price in euros falls for the fifth consecutive day this Thursdayapproaching the minimum of six weeks tested on Tuesday at € 2,838. The Xau/EUR closed Wednesday at € 2,859.10, losing 0.10% in the day.
The ounce of gold in euros has raised today to a daily maximum in € 2,862 in the European opening, but In the last hour it has dropped to a minimum of two days in € 2,846. At the moment, the Xau/EUR quote about € 2,848.85, losing 0.35% in what we have been.
From one year to this part, the price of gold in euros has earned 32.01%.
The increase in the expense in defense of NATO countries strengthens the euro
- The North Atlantic Treaty Organization (NATO) celebrated on Tuesday and Wednesday a summit in the bee that culminated with an agreement to increase the 5% defense expenditure of the GDP of Member Countries. NATO is mainly formed by European countries, in addition to the US and Canada, so the euro was widely reinforced with the news. The historical increase in defense expenditure has to be carried out in ten years, from now on until 2035, being reviewed in 2029. All member states were in favor of this increase in spending, except for Spain, which has promised to spend 2.1%.
- The CIA has issued a statement informing that Iranian Nuclears facilities have suffered serious damage after the US attack of last week, thus counteracting the information from the Pentagon that assured that the damage had been partial and could be remote in a few months. The confirmation of the end of the conflict between Israel and will weaken to gold as a safe refuge.
- After the death of seven Israeli soldiers in Gaza caused by Hamas, Israel has announced that a new distribution plan for humanitarian help in the territory will be designed. In the last 24 hours, Palestinian media have reported that the Israeli army would have killed 21 civilians at the AMR IBN school in the city of Gaza, while eight other people have been killed throughout the strip. The persistence of the conflict limits that gold extends even more the fall recorded in recent days.
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.
