Gold quotes reached a maximum of $2,148 per troy ounce after the shelling of the USS Carney in the Red Sea
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A drone attack on several merchant ships in the Red Sea triggered a rapid rise in the price of gold on the world market. As a result, quotes updated their historical maximum, reaching $2,148 per troy ounce. Even taking into account the fact that prices quickly retreated from record values, analysts expect a resumption of their growth against the backdrop of an easing of the monetary policy of the American regulator.
On Monday, December 4, at the very beginning of the day, the price of gold on the world market rapidly surpassed the level of $2.1 thousand per troy ounce. According to Investing.com, quotes on the spot market reached $2,148 per troy ounce, which is 3.3% higher than Friday’s closing values. As a result, the historical maximum set at the beginning of August 2020 was updated. However, it was not possible to stay at the achieved level for long, and quotes quickly went down, reaching $2025 per ounce by 17:00 (where they remained until the close of trading), 2.3% lower than Friday’s closing values.
The update to a historical maximum in gold prices occurred against the backdrop of an escalation of the conflict in the Middle East. On Sunday Al Jazeera reported, citing a Pentagon source, that the American destroyer Carney and a number of merchant ships in the Red Sea came under fire using missiles and drones. “Investors traditionally move into defensive gold following an increase in geopolitical risks,” notes Sovcombank chief analyst Mikhail Vasiliev. On Monday, the Pentagon confirmed that three commercial ships in the Red Sea were attacked by drones and a US destroyer came to their aid. In addition, they noted that the destroyer shot down a drone that was heading towards a warship.
As a result, the Pentagon’s message calmed market participants. “It seems that the events in the Red Sea are not serious enough to talk about an escalation of the conflict. In connection with this, gold drops to Friday’s values,” notes Anna Pilgunova, senior analyst for commodity markets at SberCIB Investment Research.
On the Moscow Exchange, gold quotes rose to the values of five weeks ago – 5.9 thousand rubles/year.
And despite the price correction on the world market, according to the results of trading in Russia, quotes remained in the positive zone – 5.83 thousand rubles / year, which is almost 0.8% higher than last Friday’s values. The weak correction in ruble prices is associated with the strengthening of the dollar on the Russian market, the exchange rate of which increased by 52 kopecks at the end of the day. to 90.93 rubles/$.
At the same time, sales continue on the spot market, and not only from speculators, but also from institutional investors – gold ETFs.
According to Bloomberg, over the past week, the assets of exchange-traded funds investing in gold fell by more than 20 tons, to 2,672 tons. “The $2,100 level is important from a psychological point of view, since this is the maximum price level for this metal over the past three years. Against this background, financial investors continue to take profits, reducing their investments in gold through ETF instruments,” notes Alexandra Falkova, portfolio manager of Pervaya Management Company.
But even taking into account the correction, quotes for the precious metal are still almost 13% higher than the values at the beginning of October. This is facilitated not only by geopolitics, but also by investors’ expectations of easing the Fed’s monetary policy against the backdrop of lower inflation in the country. According to a report from the US Department of Commerce, the consumer price index reached 3% in October, down from 3.4% in September. In addition to this, comments from regulator officials are gradually softening. “At the moment, the market is projecting the first rate cut in March and its preservation at the current level of 5.5% in December. Against this background, last Friday gold rose in price to $2,070 per ounce,” notes Anna Pilgunova.
The key event of this month for the gold market will be the Fed meeting on December 12-13. Of particular interest will be the statements of the head of the regulator, Jerome Powell, immediately after the meeting and his colleagues in the following days. “If their tone continues to soften, gold has a chance to rise in price,” Ms. Pilgunova notes. Mikhail Vasiliev does not exclude the possibility that in 2024 prices could rise to $2,200–2,300 per ounce.
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