So far gold futures have shown a relatively higher price above the price of US$ 1,800 per troy ounce. On Thursday, 13 January 2022, gold traded at US$ 1,825.70 per troy ounce on the commodity market and was down from the previous trading day, when the price of gold closed at US$ 1,827.30 per troy ounce. During the European trading morning of 13 January, the price of gold rose briefly to US$ 1,828.30 per troy ounce, but did not maintain this value.
On 13 January, at 9:22 am CET, the price of investment gold on the Commodities Exchange Center (COMEX) market was US$ 1,825.50 per troy ounce, with a daily decline of -0.10% so far. However, according to economic correspondents – based on data from the technical analysis – the price of gold has lost only 2.43% of its price in the last 52 weeks. This year-on-year decline in the price of gold on the global commodity market was initially predicted by the financial strategists around mid-2021, even in the double-digit percentage figure. According to these data, since the beginning of this year, the price of investment gold has so far shown a very slight decrease of -0.21%.
The current price of gold above US$ 1,800 per troy ounce is due to investors’ interest in gold with demand still being strong enough to face the rising exchange rate of the USD. According to the inversion rule, the strong USD reduces demand for gold and its price, but since the beginning of this year, both of these variables have been gradually strengthening. On 13 January at 9:41 am CET, according to the US Dollar Currency Index (DXY) we saw the USD at a price level of 94.79 with a daily decline of -0.13%. According to analysts, the current daily decline in the price of gold is due to the current profit withdrawals that investors made in the previous period and especially now when capitalizing on their investment positions, which they opened last year when buying at lower prices.
Investors and especially traders taking advantage of speculative financial market trends are currently expecting the first increase in US interest rates set by the Federal Reserve System’s (Fed) Federal Open Market Committee (FOMC), probably in March this year. The Fed may start reducing its balance sheet shortly afterwards, said Peter Grant, VP & Senior Metals Strategist at Zaner Metals, in a recent newsletter. If that happens, “scope is seen for 10-year yields to test the 2% level in the near term, which should continue to provide support for the dollar and make gains in gold above $1,800 difficult to sustain,” he said. This week, the market will closely monitor inflation data, Grant added. The inflation rate for December 2021, which was reported on Wednesday, 12 January 2022, reached 7% in the United States. “Inflation is likely to remain hot, but stocks are already expressing their displeasure with the Fed’s new hawkish tone,” Grant said. “That puts the Fed in a bit of a bind as they are already well behind the curve after maintaining for far too long that inflation was ‘transitory’.” For now, “diminished risk appetite could provide some haven support for gold along with the desire to hedge those inflation risks,” added Grant.