Spot gold prices shot by 2.2% to $1,712.20 an ounce at 15:55 GMT. That is as did gold futures prices that rose more than 2% to $1,714.60 in tuesday (08/November) trading session yesterday night.
The XAU/USD also showed a 2.40 percent gain to $1,715.70. It means that this pair comes with a total rally of more than 5 percent since the end of last week.
Technical buying in the stock market was a supporting factor for the rise this precious metal prices yesterday. It was as it weakens the US Dollar and puts pressure on USD Treasury bond yields.
However, the main focus of the market is actually still on the America's inflation data which will be released the day after tomorrow. Many analysts gave their speculation about that.
USD index Slumped by Half a Percent
There seems to be a big Risk-on move and pushing up stocks. On the contrary, the US Dollar fell and boosted the price of gold. This opinion said by Craig Erlam as an analyst at OANDA.
That commodity also broke above $1,680 then $1,700. Besides that, it broke through all the technical levels that presented an additional boost in the market.
Meanwhile, the United States Dollar Index is slumping half a percent to a two-week low. 8Buyers with currencies other than the USD immediately took advantage of this moment to buy gold.
Nevertheless, experts warn against keeping an eye on the release of US inflation data this week. Economists expect a reduction in Core Inflation on a monthly and annual basis, to 0.5% and 6.5%, respectively.
Falling Inflation is a Good Sign for the Market
If we see clearly that inflation will continue to fall slowly, then it will be a good sign for the market. The Fed will probably be calmer in raising their interest rates again.
This statement was said by David Meger, an analyst at High Ridge Futures. By the end of this year, 67% of traders expect Federal reserve to raise their rates by 50 basis-points.
Meanwhile, another 33% expect an increase of 75 basis points. Rising interest rates will generally make it harder for gold prices to bullish where that is a general thing that can happen.
In addition to the US Inflation data, the market is also paying attention to the Interim Elections. This election will be held by the United States this week.
EURO and Sterling are Stronger
The results of the by-election have had an impact on the last two years of Biden's presidency. Biden's policies, from government spending to military support for Ukraine, will receive an evaluation of the results of this election.
Euro and Sterling was stronger than USD yesterday or in Monday trading Session. It was because of the risk on sentiment inline with the strengthening European stocks exchange.
It was triggered by a hope that China will loosen it’s restriction do to COVID-19. Euro was 0.59% higher, mean while Sterling has been strengthening by 1.21 % so far.
A survey released yesterday showed that investors trust in the EuroZone is getting better, especially in November. It reflects hope that a limitation of gas use will be not happened.
Germany’s Production Data is Also Better
Elsewhere, investors are also optimistic due to a better situation of Germany’s production data. It showed a raise in September and beyond the Analyst expectation.
The industrial output experienced an increase of 0.6% a month before according to the Federal Statistical Office. European stock index was also 0.23 Percent higher.
Once again, the investors believed that China will loosen their restrictions. It is although the government there said that they will still on their plant about zero-covid.
It means there is a chance for quarantine, lock down, and COVID-19 test in the future. This prediction made the US dollar weakened by 0.62%.
