Gold prices are heading towards recording the first monthly gain in 5 months

Last Updated on January 2, 2021

Gold prices traded quietly in a narrow range towards a decline during today’s session, Thursday, December 31, in the last sessions of this year. But it is still heading towards recording a new monthly gain, the first in the last five months, and its best annual close since 2010, which provided support for the precious metal during the recent period.

The US dollar retreated to its lowest level in two and a half years against most global currencies according to the inverse relationship between them, but what is putting pressure on prices at the present time, markets are concerned about the weak prospects for providing financial aid in the United States, which appears to be the bill to increase stimulus measures The country’s finances will not get Senate approval quickly.

This comes as we followed up on economic developments and data in China, “the largest consumer of minerals in the world,” and on the cusp of economic developments and data expected Thursday in the United States, “the largest industrialized country in the world.”

gold prices

At exactly 08:10 GMT, the spot price of gold was down by about 0.3% to trade around 1892.90 US dollars an ounce, from today’s session opening level at 1899.00 dollars and reached the highest price at 1893.40 dollars an ounce.

Gold prices rose after the USD decline

The continued decline of the US currency comes under pressure from slowing demand for it as the best alternative investment, following the approval of the huge fiscal stimulus package in the United States, in addition to the positive developments of Coronavirus vaccines.

And gold, which is considered one of the most important hedging tools in the face of inflation and the devaluation of the currency this year, benefited from unprecedented stimulus measures and low-interest rates to mitigate the negative economic effects caused by the Coronavirus.

On the other hand, the China Federation of Logistics and Procurement revealed data on the service sector with the release of the service PMI reading, which showed a decline in activity growth to 55.7 points during the month of December compared to 56.4 points last November. This came worse than analysts’ expectations, which indicated that The expansion narrowed to 52.0 points, and for the PMI for non-manufacturing sectors, it also fell to 55.7 points this month, from 56.4 points last month.

 

Professional Trader and Analyst, economist in Financial and Forex marketsince 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.
Mohammed Abdelkhalik

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