Gold prices increased again

Gold prices increased again

Gold prices dropped yesterday, breaking the critical psychological level of $1.700 per ounce. They then recovered slightly to settle at $1.706. Since US equities resumed to trade in rally mode, gold lost its value. The precious metal had traded to its lowest level since May 27, when its prices plunged as low as $1684 per ounce. However, the metal gained $17 today, and this represents the underlying strength and, more importantly, the flexibility of gold as a safe-haven asset.

Gold prices dropped in response to the jobs report from the ADP. It was much better than what was anticipated by economists. While the forecast predicted that the ADP report would register the job loss in May of well over 8 million people, the actual numbers of those who had lost employment in May came in at 2.9 million.

Stock market news

The dollar’s drop in value is supporting the precious metal prices

Today, the most active August contract for gold is currently trading at $1722.20, up to $17.40. A falling US dollar aided today’s price increase.

On days when the precious metal’s prices closed higher came, the reason was the dollar’s weakness. It contributed to $8.70 of today’s increase.

The US dollar has lost its value for the last eight consecutive days. On May 26, it hit an intraday high, followed by gold’s monthly recent low. Since then, the dollar index has been losing value. In just over one week, it has seen an approximately 3% decline.

The five largest gold holders in the world according to the International Monetary Fund

Gold has become the preferred store of value for the world’s largest central banks and international monetary entities.

The International Monetary Fund listed the five largest gold holders in the world. Central banks hoard precious metals due to their liquidity, which helps reduce balance sheet risk. 

Gold is believed to allow these national and supranational banks to preserve capital while diversifying their portfolios. Another advantage of precious metals is that they can be moved relatively easily from one place to another.

The United States Federal Reserve is the world’s largest gold holder, with 8,133.5 tons as of May 2020. According to the International Monetary Fund and International Financial Statistics, it represents 78.3% of the precious metal reserves.

Germany is the second-largest gold accumulator, with 3,362.2 tonnes, or 74.3% of its reserves.

The International Monetary Fund has the third-largest gold reserve with 2,814 tons. 

The IMF owns the merchandise for financial strength and to help deal with unforeseen contingencies.

Italy and France are the last in the top 5 with respective holdings of 2,451.8 tons and 2,436 tons. Italy’s reserves represent 69.5% of its total reserves, while France’s treasury accumulates 63.4%.

The World Gold Council recently surveyed the sentiment of central banks towards the precious metal. The results indicated an increasingly positive attitude towards precious metals and a more definite trend to purchase gold compared to the 2019 survey. This is notable, as the previous year already saw record levels with a 650-tonne rise in global gold reserves.

In 2019, 54% of the central banks surveyed supposed an increase in global gold reserves. In 2020, the number is considerably higher, at 75%.

  • Support
  • Platform
  • Spread
  • Trading Instrument
Comments Rating 0 (0 reviews)