The price of the ounce of gold in euros ranged strongly yesterday, moving between a daily maximum of 2,993 and a minimum of 2,917, and closing the day in 2,927.28, losing 1.53% in the day.
This Tuesday, the price of Xau/USD has moved in a more tight range, rising from a daily ground of 2,919.23 to a roof of 2,947,46. The caution in the face of events in the Middle East has predominated so far, driving yellow metal but without great movements.
He Gold price in euros is currently quoted on 2,931.85, winning 0.16% daily.
From one year to this part, the price of Xau/EUR has risen 35.30%.
What factors have influenced the price of gold in recent hours?
- The conflict between Israel and Iran continues its climbing, with the main countries of the world asking its citizens to evacuate the region, while both countries exchange attacks with missiles and drones. According to the Iranian Revolutionary Guard, an attack on the Mossad in Tel Aviv would have been releasedwhose building would be on fire, while Israeli attacks have caused victims in cities like Kashan and Tehran. Besides, According to the International Atomic Energy Agency (OIEA) the underground rooms of the Iranz nuclear plant in Natanz would have been damaged by the bombing. The conflict reinforces the demand for gold as a safe refuge.
- Donald Trump left the G7 summit on Monday At night, given the intensification of the conflict in the Middle East, according to Karoline Leavitt, spokesman for the White House. Subsequently, the US president said he seeks the total surrender of Iran, adding that he is not willing to negotiate with the Iranian regime.
- Besides, Israel continues to be besieged gaza. Today Tuesday, Israeli tanks opened fire indiscriminate against a multitude of Palestinians who expected food help in Jan Yunis. The attack has left 51 dead and more than 200 injured. With the focus on Iran, the Israeli government is taking the opportunity to increase attacks against the civilian population.
- On the European front, Russia made a massive attack with missiles and drones about the capital of Ukraine on Monday night, causing 16 dead in kyiv and about 30 injured. The offensive moves away the possibilities of an agreement between the two countries and reinforces the price of gold compared to the euro.
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.
