Monday, November 28, 2016
Gold rose in early trading today (Monday) following a fall in the price of the precious metal which reached its lowest point in more than nine months, thanks to the strength of the US dollar.
However, the US currency has this week lost some of its value against a basket of global currencies, helping propel gold bullion higher.
At 09:48 this morning (Monday 28 November), gold was valued at £958.58 per troy ounce, rising by around £10 since the market’s opening.
ANZ analyst Daniel Hynes told Reuters: “The dollar strength has eased somewhat and we may be seeing some buying interest re-enter the market.
“There has been some heavy selling over the past couple of weeks, so there may be a touch of technical-based buying.”
Gold has suffered in recent weeks as the market bets on expansion and growth under President Elect Donald Trump, which is likely to lead to inflationary pressures.
The almost universal forecast that the US Federal Reserve will raise the cost of borrowing at December’s meeting has also affected sentiment for the precious metal. When the cost of borrowing is higher, the value of gold tends to fall and vice versa.
Meanwhile, the Indian gold markets have reopened for business after being closed for 16 days as part of the government’s investigation into alleged profiteering and tax evasion.
The Indian government has been carrying out the surveys after demonetarising high value notes. On the reopening of the markets, both the gold and silver prices dipped.
The global gold market is likely to be an interesting one to watch over the coming weeks, with the combination of the new President Elect, the US Federal Reserve meeting, and action on the Asian markets all having an impact.
The greater volatility that is now being seen in the world markets could make this an opportune time to buy gold. After the almost constant high prices experienced earlier in the year, there may be opportunities for bargain hunters who were wary of investing at the top of the market.