Gold is at a 13-month high and could continue its upward trend to new records, helped by a weaker dollar and speculation that aggressive monetary policy tightening in the U.S. is ending.
The price of the precious yellow metal is $2,023 per ounce at the time of writing this report. Gold breached the $2,000 threshold on Tuesday for the first time since March 2022, following data indicating a decline in job vacancies among U.S. employers in February to the lowest level since May 2021.
The data sparked worries that the world’s biggest economy might be approaching a recession, increasing the chances of the Federal Reserve continuing to ease its interest rate hike strategy, as reported by Bloomberg.
The dollar’s decline this week was another positive for non-interest-bearing gold bullion, which could test the earlier high of $2,075.47 reached in August 2020.
Concerns about the U.S. dollar and economic factors currently suggest little in favour of the U.S. currency, which is the primary driver of the price of gold, analysts say. Gold bullion also enjoys “safe haven premium” status due to current financial fears, including the recent banking crisis and geopolitical tensions.
Tuesday’s job creation and labour turnover data came ahead of Friday’s monthly jobs report. Investors and analysts will closely watch it to determine whether the U.S. economy is slowing.
In Which Currencies Are the Most Profitable Gold Trade?
Investors and governments used gold as a safe commodity to protect their assets. In addition, it represents a refuge for investors in times of crisis, when traditionally, it does not lose value but, on the contrary, gains it additionally. It is interesting to compare how much return this precious metal brought to investors in different major world currencies during the last year.
In the world’s largest economy, the United States of America, in 2022, gold recorded a small gain against the dollar, in contrast to the growth concerning some other national currencies.
A direct relationship exists between the value of gold and the U.S. dollar due to gold being primarily traded worldwide in the form of the dominant global currency.