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- Author of the entry: Mennica Skarbowa
- Date of entry:
Faced with weak economic data from the US and an increasingly strong euro, the dollar fell to its lowest level in nearly a year last week. And gold, taking advantage of the weakness of the US currency, is once again on track to reach the $1,300 per ounce forecast for the third quarter.
The past week began calmly, with gold supported by the weakest dollar in many months. Weak US inflation data, especially in contrast to favorable data from the Chinese economy, sent the US currency to levels not seen in nearly 10 months. After breaking through resistance at $1,226/oz, the metal continued its upward trend.
Tuesday brought further increases, mainly as a result of increased demand for physical gold. The weak dollar makes gold, which is quoted in this currency, more affordable for investors outside the US, and the failure of Donald Trump's administration to push the healthcare bill through the Senate certainly did not help the US currency. The precious metal broke through the $1,240 level that day, reaching its highest level since the end of June, and according to ING analysts' forecasts, it may be valued at an average of around $1,300 in the third quarter.
What is more, data published by GFMS showed an increase in physical demand for gold in India, where 514 tons of the precious metal were sold in the first half of the year (a year-on-year increase of as much as 161%). The surge in purchases in recent months was undoubtedly related to the increase in VAT on gold, which has been 3% in India since July.
On Wednesday, thanks to a slight strengthening of the dollar, gold recorded a slight decline, but remained within the range it had been in the previous day. Thursday, however, brought significant changes after ECB President Mario Draghi indicated that the bank would consider changes to its bond-buying program only in the fall. The euro quickly strengthened to levels not seen in 14 months, and the dollar index fell to its lowest level in almost a year, sending gold prices sharply higher.
Friday's trading saw a continuation of the upward trend and a break above the USD 1,250 per ounce level. As a result, the week ended clearly in positive territory, with a closing price of USD 1,255.50 per ounce on the US stock exchange. In Poland, the price of an ounce of gold at the end of the week was approximately PLN 4,590.
MW
The past week began calmly, with gold supported by the weakest dollar in many months. Weak US inflation data, especially in contrast to favorable data from the Chinese economy, sent the US currency to levels not seen in nearly 10 months. After breaking through resistance at $1,226/oz, the metal continued its upward trend.
Tuesday brought further increases, mainly as a result of increased demand for physical gold. The weak dollar makes gold, which is quoted in this currency, more affordable for investors outside the US, and the failure of Donald Trump's administration to push the healthcare bill through the Senate certainly did not help the US currency. The precious metal broke through the $1,240 level that day, reaching its highest level since the end of June, and according to ING analysts' forecasts, it may be valued at an average of around $1,300 in the third quarter.
What is more, data published by GFMS showed an increase in physical demand for gold in India, where 514 tons of the precious metal were sold in the first half of the year (a year-on-year increase of as much as 161%). The surge in purchases in recent months was undoubtedly related to the increase in VAT on gold, which has been 3% in India since July.
On Wednesday, thanks to a slight strengthening of the dollar, gold recorded a slight decline, but remained within the range it had been in the previous day. Thursday, however, brought significant changes after ECB President Mario Draghi indicated that the bank would consider changes to its bond-buying program only in the fall. The euro quickly strengthened to levels not seen in 14 months, and the dollar index fell to its lowest level in almost a year, sending gold prices sharply higher.
Friday's trading saw a continuation of the upward trend and a break above the USD 1,250 per ounce level. As a result, the week ended clearly in positive territory, with a closing price of USD 1,255.50 per ounce on the US stock exchange. In Poland, the price of an ounce of gold at the end of the week was approximately PLN 4,590.
MW
