Gold rose on Monday morning in Asian trading, supported by signs of slowing economic recovery in the United States The rise in the price and Japan.
Gold futures rose slightly by 0.04% to trade at $ 1,950.60 an ounce, at the time of writing this report at 11:33 PM ET (4:33 AM GMT), to keep the precious metal above the $ 1,900 level.
The rise in the price
US retail sales data, released last Friday, showed a smaller-than-expected increase of 1.2% on a monthly basis, versus expectations for a 1.9% rise, according to the expectations prepared by Investing.com. In addition, the Japanese GDP data released earlier today showed that the country’s economy contracted by the largest in the history of the index records, and by a greater than expected, as Japanese economic activity decreased by 7.8% on a quarterly basis for the three months between April. And June, while analysts had expected a less damaging contraction of 7.6%. On an annual basis, the Japanese economy contracted by a whopping 27.8%.
However, the US dollar opened the week’s trading in a stable fashion, from where it almost stopped last week. The dollar was supported by higher US bond yields, which helped it end several weeks of losses, and thus made gold cheaper for holders of other currencies.
But signs of easing trade war tensions between the United States and China may also have raised risk appetite, thus keeping gold’s gains limited. On Friday, news reports said that China plans to increase its purchases of US oil. These reports were issued before talks on the trade agreement between the two countries, which were scheduled for the weekend, but have been postponed.
However, there are some analysts who show doubts about the strength of gold, and who expects that the drop in the price of the precious metal to below the main psychological $ 2,000 level, after it reached the highest price in history, may continue.
TD Securities analysts told the Keto News website, which specializes in gold news and analysis: “Given the bullish market sentiment towards gold, in addition to the high inflation in open positions and speculative activity, there is still more room for gold to decline.”