The global ounce of gold continued to record more gains for the eighth session in a row, with the global gold price heading towards recording the largest weekly rise in five months to record a new historical level during today’s session before the release of the most important US jobs report data this week.
The price of an ounce of international gold rose today by 0.4% to record the highest historical level at $2,171 per ounce, after opening today’s session at $2,160 per ounce. At the time of publishing the Gold Billion technical report, it was trading at the level of $2,165 per ounce. Gold is on its way to recording a weekly rise of 4.2%, which is the largest weekly rise in 5 months, to gain approximately $86 in the price of an ounce this week.
The significant rise in gold prices, which continued for 8 consecutive sessions without correction, is supported by several factors, the most important of which is increasing expectations that the Federal Reserve will cut interest rates starting next June, after Federal Reserve Chairman Jerome Powell’s testimony before the US Congress, which lasted for two days. Powell said the Fed is not far from gaining the confidence it needs in ensuring that declining inflation is sustainable so that it can begin cutting interest rates, which he said is likely to happen in the coming months.
Powell mentioned the interest rate cut during both parts of the testimony, especially with continued pressure on him from the Banking Committee in the US Congress, which demanded that he cut the rate before the labor sector was affected in a way that companies would abandon workers. Markets are now pricing in the Fed’s first interest rate cut next June by up to 75%, which will intensify gold’s gains over the past few days. Low interest rates enhance the gains of gold, which does not provide a return to its holders.
In addition, the US dollar witnessed further decline this week, affected by expectations of a rate cut. The dollar index fell to its lowest level in 6 weeks, on its way to recording a weekly decline of 1%, which is the largest weekly decline since December. Another factor behind gold’s strong rise in recent weeks is the recent rise in stocks that have reached record levels, and investors have begun to diversify their risk exposure for fear of the start of a major sell-off in stock markets, so gold is the ideal trend for them.
Today, the markets are awaiting the release of the US government jobs report for February, which is the most important data this week and will have a significant impact on the movements of the dollar and thus the rest of the commodities and currencies. The US economy is expected to record 198 thousand new jobs after the previous reading for January was 353 thousand jobs.
The decline in the number of new jobs less than expected. This will increase fears in the markets about the impact of the US economy and the employment sector if interest rates remain high, which will increase expectations of a US interest rate cut, and thus push gold to achieve further gains.
The upside targets for global gold are currently in the region of 2175 – 2180 dollars per ounce, while if the data comes in higher than expectations, it will push gold prices to decline and enter into a negative correction, with correction targets at 2150, then 2140, then 2120 dollars per ounce. On the other hand, expectations indicate that the record rise in global gold prices may weaken consumption during the wedding season in India, while China, the largest buyer of gold, is expected to witness strong safe haven demand this year.
China and India together account for more than half of the total global demand for gold. The price of local gold in India has risen to a record level, which has led to a decline in demand, and expectations of a decline in demand for gold during the wedding season if prices continue at these levels.
In China, traders reduced gold prices by $25 to $36 from the local price, compared to a reduction last week of $36 to $48, but traders said that overall demand is expected to be strong in 2024 because the demand results from the search for a safe haven in light of the weak conditions. Investment in China during the current period. Gold prices locally
The local gold price rose to follow the record rise in global gold prices, in light of the return of prices to interaction with the global price after the exchange rate of the pound against the dollar stabilized in banks, while anticipation remains for more decisions and events during the coming period, so that gold in Egypt will return to moving with… Global price.
The most common local 21-karat gold opened trading today at the level of 3,330 pounds per gram, and was trading at the time of writing the report at the level, after it rose by 100 pounds yesterday, closing at the level of 3,300 pounds per gram after opening the session at the level of 3,200 pounds per gram. During yesterday’s session, gold recorded its highest level at 3,350 pounds per gram, then lost approximately 100 pounds of its value, then returned to its rise again, closing at the level of 3,300 pounds per gram.
This indicates the presence of significant fluctuations and instability in the gold market currently, which is expected after the major events witnessed this week, whether on the local or global level. The exchange rate of the pound against the dollar in official banks stabilized below the level of 50 pounds per gram, recording today 49.70 pounds per gram, which helped gold prices be affected by movements in the global price of an ounce, which records historical levels on a daily basis.
On the other hand, anticipation remains prevalent in the gold markets in light of the major changes in the local markets currently, after the Central Bank of Egypt announced that it would raise interest rates by 600 basis points at once, in addition to a complete floatation of the exchange rate of the pound against the dollar, so that currency pricing depends on market mechanisms.