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USD increases slightly, gold price is unpredictable, investors are uncertain

World gold price has recovered when it turned to increase slightly by 1.8% compared to last week’s slab, currently trading at around $1,846/ounce. However, unpredictable financial developments made gold investors optimistic with many worries.

At the end of the last session of the week on May 20, the Asian gold price remained stable, showing signs of creating momentum for the next gaining sessions, thanks to the weakening of the dollar, which set the highest level in two decades. and views on the US economic recovery, which increases the attractiveness of gold, becoming a safe-haven investment channel during uncertain times.

The dollar has not shown any signs of stopping weakening despite a slight increase yesterday, May 21, besides the US 10-year Treasury bond yield also slipped away from the 3% mark and stood at 2.837 % in the last session of the week, in addition, the US stock market was still red, causing gold to rebound after 4 weeks of decline.

However, a positive sign in the last session of the USD showed that the greenback’s recovery after a long period of weakness has increased slightly at 0.3% as investors continued to become concerned about the possibility of an economic recession due to the impact of the US Federal Reserve’s (Fed) efforts to curb inflation, weakening the appetite for risky assets on Wall Street. .

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VanEck International Gold Investment Fund (INIVX) commented, gold market Still in the long-term bullish momentum, the USD rally is keeping the precious metal prices in a perfect environment.

Stephen Innes, managing partner at SPI Asset Management (Switzerland), said that existing uncertainties about the risk of a recession are now giving way to concerns about US economic growth. That supports the price of gold. However, the next day he warned, the US Federal Reserve’s (Fed) tightening trend will still pose a big challenge for gold.

Federal Reserve Chairman Jerome Powell said at an event in The Wall Street Journal that the Fed will continue to tighten monetary policy by raising interest rates if inflation does not fall. That’s a statement that doesn’t bode well for gold’s near-term outlook as gold is seen as a store of value in times of economic crisis, but often becomes less attractive to investors. investment when US interest rates are higher

Currently, the fear of the protracted Russia-Ukraine conflict continues to cover the gold market, in addition, the Covid-19 situation in China and global inflation increase. However, investors are paying more attention to the fluctuations of the USD, leading to a disadvantage in the gold market.

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World gold price chart

The dollar has been supported by monetary policies from the Fed to combat high inflation in the US. However, increased volatility in global financial markets, coupled with the high gains the dollar has enjoyed in recent months, has led investors to look to other safe-haven assets such as the dollar. yen and Swiss franc.

Specifically, compared with the USD, the weekly gain for the Swiss franc is gaining nearly 3%, while the Japanese yen has increased by nearly 1%; pound sterling, up 0.1% .

Gold, which is considered a “safe haven” during economic crises. However, recent global financial fluctuations, in addition, the context of rising inflation in the US has not stopped causing gold to be shared for other safe investment channels.

Ngoc Cuong

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US stocks wobble, USD weakens, gold ends 4 weeks of deep declineDue to the volatility of many other investment channels plus the Fed’s monetary policy, investors’ cash flow into gold was not strong enough, the supply and demand in the gold market became unstable during the week, causing the gold price to fluctuate.

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