The price of gold remains relatively high during the European morning of Tuesday, September 19, 2023, despite investor concerns ahead of the meeting of the central bank of the US Federal Reserve System (FED). Today, September 19, 2023, the meeting of the central bankers of the United States begins as part of the regular currency policy meeting of the Federal Open Market Committee (FOMC – Federal Open Market Committee), which will comment on the current interest rates in the USA and possibly change their current level. It is the level of these rates that affects the exchange value of the US dollar (USD) and that is the key to the price of gold.
Currently, during the European Tuesday morning on 19/09/2023, at approximately 7:36 CET, investment gold was traded on the commodity market COMEX (Commodities Exchange Centre) at a value of USD 1,952.70 per troy ounce, with a slight daily decrease of -0 .04% of its previous price. According to analysts of brokerage companies and financial strategists of the commodity market, this current falling gold price is only a small technical correlation of the gold price with respect to the significant potential of its decline in the event that the FOMC FED meeting decides to raise interest rates further. In the event that the FOMC members decide on this option of further rate increases, the price of gold, due to the potential growth of the exchange value of the USD, will cease to be an attractive investment for investors for some time in the form of holding gold, which does not generate any income except for its price movement. In particular, the purchase of gold will be disadvantageous for investors from so-called non-dollar destinations, which will reduce demand and lead to a drop in gold prices on the commodity market. Reported by economic correspondents.
The current price of gold according to technical analysis data shows its total annual growth of +11.17% of its price in the last 52 weeks, but since the beginning of this year 2023, the price of gold has already increased by only +2.21% in the last 37 weeks. Currently, the price of investment gold varies within the commodity market trades in the price range from USD 1,940 to USD 1,975 per troy ounce, and this at the current very strong exchange value of the US dollar (USD). The exchange value of the USD measured by the dollar index DXY (US Dollar Currency Index) reached on 19/9/2023, at approximately 7:37 CET, a point level of 105.20 USD points, which according to analysts is one of the highest values in the last few years based on the long-term average and yet the price of investment gold maintains its relatively high value. This state of affairs is largely due to investor sentiment with regard to the considerably high global inflation, and it is gold that is considered by investors to be a keeper of permanent financial value. However, the rising exchange value of the USD makes gold trades less attractive to non-dollar buyers, and the rule of supply and demand is fully related to this.
This situation of a strong USD is understandably reflected in the exchange rate of the global currency pair, i.e. the single European currency Euro (EUR) and the US dollar (USD), which on the indicated day and time were traded on the foreign exchange market as part of forex operations at a mutual exchange rate at a value of 1.068 USD to the EUR with the EUR down by -0.131% against the USD on the day to date. So far, investors, traders and other participants in the financial markets overwhelmingly expect the FOMC FED to leave interest rates unchanged, the result of the decision will be known to everyone this Wednesday, September 20, 2023, when the head of the FED, Mr. Jerome Powell, will announce this currency political decision, which as so it will also affect the price of gold. “Fed Chairman Powell’s speech is likely to highlight that inflation risks have not gone away, but are in inflation wait mode,” said Mr Michael Langford, chief investment officer at Scorpion Minerals. Low gasoline and diesel inventories globally pose a material risk to inflation targets in the short term, Mr. Langford said, adding that if inflation moves significantly higher again, it will be harder to sustain. However, this situation described by Mr. Langford would be a positive signal for the potential for gold price growth, investment strategists say