In the Commodity trade this morning, gold strengthen because the market is looking for a short buying opportunity after the correction over the past week.
In the previous session, the greenback was under pressure from gold, so this made the December contract gold price on the New York Mercantile Exchange at Comex division futures closed higher at $ 3.10 or 0.31% at $ 1221.70 per troy ounce . For a week of trading, the price of gold decreased by 0.8%.
And this condition continued for a moment when the commodity market trading in Tokyo took place this morning, where the December contract gold price temporarily experienced conditions that rose by $ 2.60 or 0.21% at the level of $ 1225.0 per troy ounce.
The previous gold price in an improving condition, aka emerging buyback accompanied by the US dollar strengthened again and some US employment and service activity data is still very supportive so that the Fed’s rate hike is somewhat delayed, making the situation turn around briefly and the buying side appears in weekend trading as well as sweeteners for closing weekly trade.
Last week, although the Fed did not change interest rates, there was a better outlook or optimism for the US economy by the Fed, which made gold less attractive if collected for a long time, moreover some US economic data was still good results suggesting non-farm payroll data also it will be even better. President Trump himself is proud of the latest condition of the US economy which feels no obstacles even though there is a tariff policy.
Plans for an increase in the Fed’s interest rates and trade war problems still always block the positive movement of gold. As we know that before the Fed chairman Jerome Powell once stated that the US economy is getting better and more solid so that the US economy needs a rapid rate hike to avoid an economic recession that can arise at any time. And the results of the Fed’s own meeting reinforced its view of the future of a more solid US economy so that later September interest rates will certainly rise again.
Gold prices hit a record low this year again last week before a weekend buyback side, where the potential for a rebound or a rise in gold prices is supported by a statement from President Trump the previous weekend who did not want the Fed’s interest rate to rise continuously .
Not enough there, Trump has also accused the European Union and China of manipulating their currency movements and always withholding interest rates so that the dollar index has always strengthened so far. The verbal potential of this intervention aims to temporarily weaken the US dollar and use it with the gold side even though this condition was slightly limited last week because China is planning to raise new tariffs for US imports as a countermeasure.
This condition can make gold prices corrected again. As we know that when the trade war heats up, the price of gold can be corrected. This is due to the new tariffs, so that the price of goods in the US will rise and the price of goods will increase and this indicates a rise in inflation. And gold can worsen if inflation rises. The prospect of an increase in the Fed’s interest rates due to high inflation is a frequent cause of gold being corrected if it hears the trade war.
But the potential for buybacks appeared briefly this morning after the release of US employment data in which the US dollar retreated for a moment and this condition utilized gold for a momentary buying position this morning. But this condition can be reversed if the issue of trade war heats up again.