empty
14.07.2023 10:55 PM
Is Gold heading to $2,000?

This image is no longer relevant

Gold is experiencing a slight decline after a vigorous rise yesterday and is consolidating near $1,955.

As of 17:10 UTC+3, the price of August gold futures on the Comex exchange has dropped by 0.44% to $1,955.25 per ounce. By that time, September silver futures had also declined by 0.24% to $24.82 per ounce.

Yesterday, the XAU/USD pair reached a new record high since June 16, hitting the level of $1,963. At the end of the trading week, the market is experiencing a corrective decline, despite the overall favorable fundamental background for buyers.

The primary factor driving the increase in precious metal prices in recent days has been the weakness of the U.S. dollar. However, it is fair to mention that the dollar's exchange rate was quite stable this morning and even increased by 0.06% to reach 99.83 at the time of preparing this material.

Nevertheless, the U.S. Consumer Price Index report released on Wednesday significantly weakened the positions of the American currency against other majors. The annual consumer inflation rate in the U.S. fell from 4% to 3% in June, although analysts had predicted a decrease to 3.1%. The core inflation in the world's second largest economy decreased from 5.3% in May to 4.8% in June. This decline was more substantial than what experts had expected (they only anticipated a decrease in inflation to 5%).

The Producer Price Index data, released on Thursday, also showed a decline, from 0.9% to 0.1% on an annual basis. The core index, in this case, corrected down from 2.8% to 2.4%.

These factors have influenced analysts to revise their earlier forecasts regarding U.S. monetary policy. It is now expected that the Federal Reserve will only raise interest rates once by the end of this year, and will announce it at the July meeting.

According to the CME FedWatch tool, indicating expectations for the U.S. key interest rate, the probability of a rate hike this month exceeds 90%. However, the probability of another hike after July is estimated at 15%, compared to a previous level of 40% earlier this week.

The U.S. dollar was the biggest loser amid such news, while commodity prices, which are denominated in the American currency, benefited.

In addition to these factors, the demand for gold is supported by the decline in U.S. Treasury bond yields, which serve as an alternative cost of holding non-interest-bearing metals. The yield on U.S. Treasury bonds has reached multi-month lows and continues to decline.

The yield on 2-year Treasury notes has fallen to 4.65%, while the yield on 10-year Treasury notes dropped to 3.80%. Over the past week, the yield on 2-year bonds decreased by 6%, while the yield on 10-year bonds decreased by only 3%.

As the U.S. dollar and Treasury yields decline, and the Federal Reserve plans a long-term pause in interest rate hikes, holding long positions with a target of $2,000 is the most reasonable decision for the XAU/USD pair.

Andreeva Natalya,
Analytical expert of InstaForex
© 2007-2025
Summary
Urgency
Analytic
Andreeva Natalya
Start trade
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

US Market News Digest for August 12

On August 11, US stock indices ended the session with slight losses. Yet, investor optimism improved following Donald Trump's statements on resuming chip supplies to China and extending the trade

Ekaterina Kiseleva 13:17 2025-08-12 UTC+2

Markets in wait-and-see mode: inflation figures, leaders' meeting take center stage

Wall Street stocks ended the day in the red. Traders of dollars and bonds are awaiting the release of US consumer price data. Oil prices are trading flat ahead

11:10 2025-08-12 UTC+2

Markets on hold: What will inflation data and leaders' meeting decide?

Wall Street shares ended lower amid a volatile trading session. The dollar and bonds await the publication of data on the US consumer price index Oil prices are trading unchanged

Thomas Frank 11:07 2025-08-12 UTC+2

Bitcoin's roller coaster: defeat after victory and another attempt to grow. Grimaces of volatility and bullish forecast for S&P 500

The flagship cryptocurrency opened the day with an attempt to recover, seeking to offset its recent decline. Bitcoin has now joined the crypto race, competing with Ethereum, which is also

Larisa Kolesnikova 10:48 2025-08-12 UTC+2

Bitcoin's rally, 8 underestimated altcoins, and positive news from US crypto market

Rapid changes continue to sweep through the cryptocurrency market: Bitcoin is once again approaching its all-time highs, key altcoins are posting confident gains, and investors are exploring new profit opportunities

Natalia Andreeva 14:31 2025-08-11 UTC+2

US Market News Digest for August 11

The S&P 500 and Nasdaq indices rose by 0.78% and 0.97%, respectively. Investors are responding positively to prospects for a peaceful settlement of the conflict in Ukraine and a decline

Ekaterina Kiseleva 13:01 2025-08-11 UTC+2

Global markets edge higher: investors brace for pivotal US-Russia talks

Europe in the green: stocks advance on hopes for a peace deal and anticipation of US inflation data. Asia gains: supported by strong earnings reports and the tech sector

10:56 2025-08-11 UTC+2

Global markets are on the rise: investors are holding their breath ahead of key US-Russia talks

Europe is in the black: stocks are growing on hopes of a peace treaty and expectations of inflation in the US. Asia is growing: strong reports and the tech sector

Thomas Frank 10:56 2025-08-11 UTC+2

Pharmaceutical giant under pressure: Eli Lilly loses ground on weak news

Eli Lilly shares fall after late-stage data on oral weight-loss drug Weekly jobless claims hit highest in a month Japan's Topix index rises above 3,000 for first time Indices

Thomas Frank 07:55 2025-08-08 UTC+2

Tech leads rally: Apple commits $100 billion, S&P 500 sets records

Apple is set to announce a $100 billion investment, according to a White House spokesperson. S&P 500 earnings reports continue to exceed expectations. Tech stocks lead the rally amid strong

10:25 2025-08-07 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.