Commerzbank comments on the surge in gold prices. ProFinanceService.

06 Sep 2016

Weak data on the labor market of the USA released on Friday have pushed gold prices up by more than $ 20 per ounce. Such weak data again reduced the probability of an increase in the Fed rateat the meeting in September (the rate growth may put pressure on gold prices). However, this does not mean that the rate will never rise. In fact, after various ups-and-downs, in recent years the US dollar shows a strong upward trend. This makes the increase in the gold market even more remarkable. Today, the yellow metal price in terms of euros rose to a two-week maximum of almost € 1190 per ounce. In general, in the coming days we can see the growth of the gold price volatility in terms of euros. The ECB meeting will be held on Thursday. It may be decided there on further measures to stimulate the economy. Taking into account the negative nominal and real interest rates in the euro area, the demand for gold is likely to remain at the high level. However, investors in the market may be aware that self-complacency in the financial markets does not justify further surge in gold prices– at least in the short term. As a result, financial investors lock in profits on precious metals. In the week before August 30, they reduced the number of net long positions for gold by 22 thousand ofcontracts, to 231.6 thousand, which is the lowest level since mid-June.