World Gold Prices Are at the Lowest Level

World gold prices remained at the lowest level in 3 weeks. This was influenced by producer prices and US retail sales data which was recorded to be higher than expected.

Reported by liputan6.com, the price of gold on the spot market rose 0.1% to USD 1,909.05 per ounce after touching USD 1,900.81. This price is the lowest since August 23, 2023. This data proves that US interest rates are likely to remain higher. This interest rate will also last for a longer time. Thus increasing the dollar and bond yields.

“We saw some headline inflation data that was higher than expected. As a result, we see yields rising again and continuing to put downward pressure on the spot gold market.” said Director of Metals Trading David Meger (15/9/2023).

Data showed US producer prices increased by 0.7% in August. Meanwhile US retail sales increased by 0.6% compared to Reuters expectations. The US dollar index jumped 0.6% to its highest level in six months. This reduces the attractiveness of gold for overseas investors, and the yield on 10-year bonds also increases.

“There are concerns that the Fed may continue to raise interest rates or yields continue to rise. “This puts pressure on the gold market,” said Meger.

Interest rate

Although the market expects that the Fed will keep interest rates on hold, there is a 39% chance of a rate hike in November. According to CME’s FedWatch Tool, higher interest rates reduce the appeal of gold bullion, which does not bear interest.

Previously the European Central Bank (ECB) raised its main interest rate to a record high of 4%. But it hints that this may be the final step.

“However, the USD 1,900 level for gold is well supported and will attract some bargain hunters,” analysts said.

Meanwhile, the price of silver fell 0.8% to USD 22.66 per ounce. This decline occurred after reaching the lowest level in 4 weeks. Meanwhile, platinum rose 0.6% to USD 905.87. Palladium prices fell 1% to USD 1,246.10, after touching a 3-week peak.