{"id":60962,"date":"2014-09-26T07:04:24","date_gmt":"2014-09-26T11:04:24","guid":{"rendered":"http:\/\/countingpips.com\/?p=60962"},"modified":"2014-09-26T07:13:44","modified_gmt":"2014-09-26T11:13:44","slug":"gold-prices-fluctuate-hitting-their-lowest-in-2014","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/09\/gold-prices-fluctuate-hitting-their-lowest-in-2014\/","title":{"rendered":"Gold Prices Fluctuate, Hitting Their Lowest In 2014"},"content":{"rendered":"
September 26, 2014<\/div>
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By HY Markets Forex Blog<\/a><\/u><\/strong> <\/p>\n

Gold prices have fluctuated recently, hitting their lowest so far this year and then rebounding slightly.\u00a0<\/span><\/p>\n

The precious metal has repeatedly depreciated as the U.S. dollar gained, and the greenback recently reached a four-year high<\/a> against a basket of other currencies, Bloomberg reported. Gold and this reserve currency frequently experience an inverse relationship. Many commodities contracts are dollar-denominated. As a result, when the greenback rises in value, investors using foreign currencies must pay more for these raw materials. Conversely, if the U.S. dollar declines, market participants using other currencies can buy more.<\/span><\/span><\/p>\n

Gold prices reach 2014 low<\/span><\/strong>
\nOn Sept. 19, December contracts for this precious metal settled down 0.8 percent at $1,216.60 a troy ounce<\/a>, their lowest since Dec. 31, 2013, according to The Wall Street Journal. This happened as the greenback rose sharply, with the ICE U.S. Dollar Index increasing in value for a tenth consecutive week. This represented the measure’s most sustained rally in at least 28 years.<\/span><\/p>\n

The dollar surged on Wednesday, Sept. 17, after Federal Reserve policymakers provided their most recent statements on the economy, the media outlet reported. On that day, the government officials indicated that the central bank’s benchmark interest rates will stay near record lows even though the economy continues to show signs of improvement.<\/span><\/p>\n

Markets anticipate rising interest rates<\/span><\/strong>
\nMarket participants have been focused on these borrowing costs for months, speculating on when the central bank will opt to hike them. Previously, they were primarily interested in quantitative easing, monitoring Fed statements to get a sense of what timeline the financial institution would use to reduce its bond purchases. The central bank’s policymakers have been gradually lowering these transactions throughout 2014, and now market participants have turned their attention to the timeline the Fed will use move its benchmark interest rates higher.<\/span><\/p>

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While the central bank has kept its benchmark rates near record lows in an attempt to stimulate economic growth, these actions may have put upward pressure on the price of gold. However, as borrowing costs move higher, investors could shun the precious metal and opt for other alternatives, as gold does not pay interest.<\/span><\/p>\n

Investors fleeing gold, says expert<\/span><\/strong>
\nThis flight from the commodity is already happening, Peter Hug, global trading director at Kitco Metals, told The Wall Street Journal.<\/span><\/p>\n

“Cash is flowing to the dollar, the U.S. stock market and the U.S. bond market, and out of precious metals,” he told the news source. “You get the feeling that (precious metals) investors have just given up.”<\/span><\/p>\n

David Meger, director of metals trading at brokerage Vision Financial, commented on these trends<\/a> when speaking with Reuters on Sept. 19.<\/span><\/p>\n

“It’s the same story since last week,” he told the news source. “Gold is under pressure with the dollar at an extremely lofty level, U.S. equities at all-time high, and expectations that U.S. interest rates will rise eventually.”<\/span><\/p>\n

Gold rebounds later in month<\/span><\/strong>
\nGold prices recovered slightly<\/a> on Wednesday, Sept. 22, as December contracts for the precious metal increased 0.1 percent to settle at $1,217.90 an ounce at 1:36 p.m. on the Comex division of the New York Mercantile Exchange, according to Bloomberg. This modest uptick happened after December gold dropped to $1,208.80, the lowest for a most-active contract since Jan. 2.<\/span><\/p>\n

Even after this gain, gold prices were still 7.9 percent lower for the quarter, the media outlet reported. In comparison, the greenback, when compared to a basket of 10 other currencies, had risen 5.4 percent. Bart Melek, head of commodity strategy at TD Securities in Toronto, weighed in on the situation.<\/span><\/p>\n

“Gold got some support from the weakness in equities and lower-than-expected U.S. home-sales data,” he told the news source. “The overall sentiment remains bearish.”<\/span><\/p>\n

Precious metal suffers another drop<\/span><\/strong>
\nThe precious metal declined once again on Sept. 24, as December gold settled down 0.2 percent<\/a> at $1,219.50 at 1:45 p.m. on the Comex, after appreciating 0.3 percent in the previous trading session, according to Bloomberg. The rally that happened on Tuesday, Sept. 23, coincided with airstrikes targeting militants in Western Asian nation Syria. While gold moved lower, the U.S. dollar surged against a basket of 10 currencies, reaching its highest value since June 2010.<\/span><\/p>\n

These movements brought the greenback’s gain to 5.6 percent this quarter, and gold’s loss to 7.8 percent, the media outlet reported. Frank McGhee, head dealer at Integrated Brokerage Services LLC in Chicago, provided his input on the commodity’s situation.<\/span><\/p>\n

“Barring some very temporary support from political turmoil, the sentiment remains very bearish,” he told the news source. “Gold will decline further, as it’s becoming more and more clear that rates are rising and inflation is not.”\u00a0<\/span><\/p>\n

Investors who trade gold might benefit from knowing about the commodity’s price movements, in addition to the reasons that market expects attributed for these price movements.<\/span><\/p>\n

The post Gold Prices Fluctuate, Hitting Their Lowest In 2014<\/a> appeared first on | HY Markets Official blog<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

By HY Markets Forex Blog Gold prices have fluctuated recently, hitting their lowest so far this year and then rebounding slightly.\u00a0 The precious metal has repeatedly depreciated as the U.S. dollar gained, and the greenback recently reached a four-year high against a basket of other currencies, Bloomberg reported. Gold and this reserve currency frequently experience […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-60962","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/60962","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=60962"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/60962\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=60962"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=60962"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=60962"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}