Gold prices returned to trading near $ 1,840 an ounce again during trading today, Thursday, after reaching levels of $ 1,855 an ounce yesterday, against the backdrop of the decline of the US dollar affected by negative economic data issued in the United States yesterday evening in light of a state of anticipation dominating the markets to know the decision of the US Congress About the upcoming stimulus package.
During the last hour, spot contracts for gold reached levels of $ 1,841.45 an ounce, achieving a slight rise of 0.05%, while futures contracts for gold during the day recorded $ 1,842.35 an ounce, after dropping slightly by 0.02%.
Gold prices had witnessed a noticeable rise during trading on Wednesday, surpassing levels of $ 1,855 an ounce, with the US dollar declining yesterday after the release of inflation data in the United States during last January, which disappointed with the beginning of this year. The core CPI reached zero levels, retreating from 0.1%, and the monthly CPI stabilized at 0.3% levels, in line with market expectations.
After the release of that data, gold prices rose strongly at the expense of the US dollar, and was able to exceed levels of 1,850 dollars an ounce, and even continued to rise to record 1,855.45 dollars an ounce, to continue the gains recorded since the end of last week after the release of labor market data in the United States, which came worse in expectations At the beginning of 2021.
And due to the existence of an inverse relationship between the US dollar index and gold prices, the decline in the US dollar during the day supported the reduction in gold prices. The US dollar index, which measures the currency’s performance against a basket of 6 major currencies, recorded 90.37 until the last hour, down by 0.06% on a daily basis.
This slight change in the movements of gold prices and the US dollar is due to the state of anticipation that prevails in the markets to know the US Congress’s decision regarding the stimulus package announced by President Joe Biden upon taking office at the beginning of this year. It is expected that this package, if approved, will put pressure on the movements of the US dollar strongly, with increased liquidity in the markets.
Consequently, most of the positive news about the stimulus package this week reflected on the US dollar negatively, which supported the rise in gold prices, but hopes for a faster recovery of the economy after the approval of the package amounting to $ 1.9 trillion has limited the rises in gold prices, as a safe haven. Which investors resort to in crises.