Review of EGU Price for the Last Month
Statistics from the past 30 days showed that the EGU prices have risen by less than 1% on 23 days and increased between 1% to 3% across seven days. EGU prices hit the highest, at above 2% on the 1st of April.
Market News Recap
Gold prices had a strong start in April, gaining 1.2 percent in the first week of the month. Although signals of a US economic recovery—buoyed by pandemic relief stimulus cheques and increased Covid-19 vaccinations—put pressure on gold prices, this was balanced by softening Treasury yields and a lower US dollar.
Gold continued to rally in the second week of April as bond yields fell and the US dollar weakened further. As a result, gold prices broke above the resistance level of USD 1,750, setting a new highest mark since February.
Gold remained bullish for the first half of the following week. Bond yields dropped lower than 1.6 percent, causing gold prices to rise to USD 1,793.32 per ounce. However, the trend reversed towards the end of the week as robust US economic data pushed bond yields higher. As a result, gold prices dropped 0.8 percent to USD 1,770.04 per ounce.
In the last week of April, gold prices fluctuated together with the rise and fall of the US dollar and bond yields. During mid-week, US Treasury yields increased and hit their highest mark since mid-April, resulting in a drop in gold prices and a higher opportunity cost for gold.
On the other hand, the US Federal Reserve promised to keep interest rates near zero to boost economic recovery on Thursday, leading to a gold price increase of 0.2 percent to USD 1,784.94 per ounce. In addition, US President Joe Biden’s plans for a USD 1.8 trillion stimulus package favours gold as gold is viewed as a hedge against inflation.
TD Securities head of global strategy, Bart Melek, says, “As inflation moves higher, it is unlikely that we’ll see a big pick up in yields, which is good for gold.” He explained that gold is in a good position to break above USD 1,800 this year. As commodity prices continue rising, investors are protecting themselves against possible inflation, which would, in turn, support gold prices.
1. April EGU Weekly Digests
2. Gold falls as US Treasure yields firms; all eyes on Fed rate decision – The Business Times
3. Gold gains after US Fed maintains accommodative stance – The Business Times
4. Gold price rally in May? Chances are tied to inflation expectations as US data runs hot – analysts – Kitco
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