Gold Price Weakness Begins Visible Again
In trading of gold commodities in the afternoon to late afternoon on trading in the precious metal commodity exchanges entering the London market, the current price of gold continues to move negatively because of negative news also from the European Union.
In its annual meeting, the EU has reached an agreement to tackle the problem of migrants that have made Germany’s politics in conflict and some of its member states have objected to receiving a wave of refugees from Asia and Africa. The issue of EU migrants has become a key consideration in their annual meetings as some member states have experienced difficulties in places and funds in organizing these migrant refugees.
And this morning it was German Interior Minister Horst Seehofer who wanted to resign because Chancellor Angela Merkel has agreed to ease the border issue Seehofer fears the country’s sovereignty side is chaotic because migrant problems have caused many problems, especially the financial problems and stability of the country. This condition actually benefit the dollar index earlier this week so gold back down again.
This makes the price of gold for August contracts on the Comex division of the New York Mercantile Exchange while down $ 4.60 or 0.37% at $ 1249.90 a troy ounce. For July’s silver contract price on the Comex it temporarily gained $ 0.18 or 1.18% at $ 16.02 a troy ounce.
Earlier gold prices continued to depreciate by 4% this month due to Fed interest rate issues. Although some US economic data fell, but gold remained under pressure. The Federal Reserve has forecast that economic growth in the US will continue to rise this quarter so the US economy needs an increase in interest rates that still exist this year. Some Fed officials say that the US economy needs a gradual rate hike and is expected to be 2 more this year.
Earlier gold prices were under pressure due to trade war issues. The commercial war means that consumer purchasing power in the US will increase in price, which means it will also cause an inflation rate in the US to rise. This condition certainly paved the way for the Fed to make it easier to raise interest rates, so this situation is certainly not friendly to gold.
The trade war situation will continue to have a negative impact on gold, as investors see the prospect of a rate hike. As we know that the Fed rate increase is expected to happen 2 more times, bringing the total to 4 times this year. It is also expected that the Fed rate increase could still continue until 2019.
Later that night there is ISM manufacturing data. If the data improves, then the gold price has a chance to be depressed.