Friday’s gold rally was almost completely wiped out on Monday, when the spot price dropped by almost a dollar. Still, hopes are beginning to return to the market, mainly by the seven consecutive weeks of decline in US crude oil reserves.
The country’s stock pickup was reached in March, and since then it has fallen by about 13%, which has led many analysts to believe that the steady rise in price is already on track to become a reality. While OPEC production restrictions have been strictly enforced by participating countries, US oil production has exceeded 9.6 million barrels per day – the highest levels since July 2015.
Preliminary stock data disappointed the markets and the price dropped in the early hours in Wednesday, wiping out the gains in the previous session. Data showed a decrease of 3. 6 million barrels, but an increase of 1.4 million barrels in gasoline stocks at an expected drop there. On Wednesday morning Brent futures traded 26 cents lower, to 51.61 dollars a barrel. WTI low crude oil futures fell 0.4 percent or 20 cents to 47.63 dollars.
After two consecutive days of declines, we witnessed a rise in the dollar on Tuesday, mainly due to shifting positions in anticipation of a meeting of influential central bankers in Jackson Hall, USA, which begins on Thursday. The meeting will be attended by both Mario Draghi and Janet Yellen, along with other Fed representatives.
The strength of green money was fueled by the weakness in the euro due to disappointing figures in the ZEW index measuring investor confidence in Germany. The fall in the index exceeded the expectations, which provided a slight decrease compared to July. The US currency has made progress against the basket of currencies on Tuesday and has achieved its biggest daily rise for the past week. The dollar index rose by about 0.5% to 93.55 points, while the euro lost 0.52% against the dollar, reaching a rate of 1.
The stronger dollar led to a decrease in the price of gold on Tuesday. There are fears that Mario Draghi could use the moment at Jackson Hall to step away from the aggressive tone towards tighten monetary policy to ensure flexibility. This would weaken the euro against the dollar, but at the expense of gold. The spot price of precious metal fell 0.4 percent on Tuesday but is still close to the peak last week, at $1,300.80 per ounce. Futures also recorded a decline of 0.4 per cent and ended trading on Tuesday at $1,291.