Fundamental Comment

Gold hits one-week low on firmer dollar

733

Gold prices fell at the beginning of the week to resume its decline for a third session in a row, sliding to a one-week low in the light of the easing geopolitical tensions.

The precious metal recorded its lowest level today at $1327.13 an ounce after opening the session at $1334.19.

Gold’s fall could be largely attributed to the dollar’s jump to a seven-week high, where the dollar index hit a peak of 90.49 after US 10-year Treasury yield edged up to the highest level since January 2014 to close to 3%,

In fact, the significant rise in U.S. bond return lowered demand on gold that does not provide any return for its holders.

Market fears have fallen with the ease in geopolitical tensions, thereby increasing investors’ risk appetite and cutting demand on safe haven assets.

The United States welcomed North Korea's commitment to halt its nuclear program and missile tests, raising hopes the two countries would settle their disputes.

Despite President Trump's comments that the road is long before the end of the North Korean nuclear issue, he welcomed the current moves and announced his aspiration to meet with North Korea's leader.

Also, trade frictions between the U.S. and China eased slightly after US Treasury Secretary Minuchin said he will visit China in an effort to resolve trade disputes between the world's two largest economies. 

Share Article