The price of gold weakens under the pressure of a strengthening US dollar


The current exchange value of the US dollar (USD) keeps the price of investment gold below the limit of USD 2,000 per troy ounce, and it then slides to its lower support price limit of around USD 1,900 per troy ounce. The price of investment gold thus recorded its more significant decline already during yesterday’s Tuesday, 12/09/2023, and now during the current trading day of Wednesday 13/09/2023, the price of investment gold maintains a downward trading trend. The current investor sentiment is thus focused on the trading trend strengthening the exchange value of the USD with regard to the expected reporting of the Consumer Price Index (CPI) data in the USA.

Currently, during European noon on Wednesday, September 13, 2023, at approximately 12:21 CET, investment gold was traded on the commodity market COMEX (Commodities Exchange Centre) at a value of USD 1,933.30 per troy ounce, with a daily decrease of – 0.09% of its previous price. The current price of investment gold in comparison according to technical analysis data represents an annual increase of +8.35% of its price over the last 52 weeks, of which the price of investment gold has increased by +1.19% since the beginning of this year 2023. The current price of gold was reached in a situation where the exchange value of USD according to the dollar index DXY (US Dollar Currency Index) was moving at the level of its point status at the value of 104.77 USD points with a daily growth of + 0.06% of the point value according to this index, which compares the value of USD with another six major world currencies.

The dollar index DXY (US Dollar Currency Index), which made investment gold more expensive for holders of other currencies, so-called from outside the dollar zone, and thus gained + 0.3% more points according to this index, before the data of the consumer price index (CPI – Consumer Price Index) in the USA, to be published on Wednesday 13/09/2023 already at 14:30 CET, which could affect the decision of the central bankers of the United States from the Federal Reserve System (FED) on interest rates. “People are exiting the market and waiting for the data to come out and maybe buy gold at a lower price because there is still (some) safe gold buying,” said Bob Haberkorn, chief market strategist at RJO Futures. U.S. headline inflation rose 0.6% in August, compared with a 0.2% increase the previous month, according to a Reuters poll. However, Americans’ overall view of inflation changed little in August of this year 2023, the New York Federal Reserve System (FED) reported in its report on Monday, September 11, 2023.

Higher interest rates are dulling the luster of unyielding precious metals, with traders betting on a roughly 47% chance of a hike this November 2023 after a widely expected pause by the Federal Open Market Committee Federal Reserve System (FOMC) as early as next week, when the September US central bankers meeting “If the inflation data were to move above market forecasts, gold prices are likely to depreciate as expectations around the Fed’s FOMC decision will rise and there is room for interest rate hikes later this year,” said FXTM Chief Research Analyst Mr. Lukman Otunuga . Traders, investors and other participants in the financial markets are also waiting for the ECB’s decision on rates, which will take place on Thursday 14/09/2023. In this matter, the ECB forwards for the short-term interest rate (ESTR) in euros are valued slightly more according to the survey and there is a higher than 50% chance of a further increase in interest rates already this week, according to economic correspondents in connection with financial strategists .