The ounce of gold in euros has reached in the weekly opening its highest level since last June 16as an initial reaction to the United States attack on Iran’s nuclear facilities. This climb comes after the Xau/EUR closed Friday over € 2,923.57, losing 0.65% daily.
The price of gold in euros has jumped to a One week ceiling at € 2,959.64 In the Asian opening, although at the end of it it has fallen to a minimum daily of € 2,909.69. During the European session, the Xau has once again taken impulse Quoting at this time around € 2,941, where it earns 0.60% in what we have been.
From one year to this part, the price of gold in euros has earned 35.33%.
Iran’s United States attack drives gold
- The United States bombed three nuclear facilities from Iran yesterday Sundayspecifically those of Fordo, Isfahán and Natanz. The same American president Donald Trump communicated the news through Truth Social, where he said that “this is a historical moment for the United States, Israel and the world. Iran must now accept ending this war.” The news promoted risk aversion in the opening of markets on Mondayleading to gold to its highest level from June 16 compared to the euro.
- Iran reacted to the attacks by launching an offensive with missiles against Israel in which more than 85 people were injured. In addition, one of the Iranian army spokesmen, Ebrahim Zolfaqari, warned that the US should expect serious consequences for their actions.
- Meanwhile, markets wait tense at Threat of Iran to close the Ormuz Straitwhich would affect the oil supply and prices, since 20% of the world crude passes through this route. The fears for the escalation of the conflict in the Middle East maintains the price of upward gold as a safe refuge value.
- On the other hand, today the Preliminary PMI data of the Eurozone, showing figures below expected in the manufacturing sector. The indicator remained at 49.4 in June, below the 49.8 expected points, while the PMI of Services rose to 50 from May 49.7, in line with the estimated. The data has not favored the impulse of the euro, keeping any decrease in the Xau/EUR.
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.
