Gold continues to benefit from the awful news. The sad headlines of the world media increase its investment attractiveness. Against the background of recent events in Afghanistan, stock prices have moved to a decline, while the classic protective tool against risks, on the contrary, has increased in price.
Yesterday, gold rose by almost 0.7%, or $11.60. The asset ended the session on the New York COMEX Exchange at $1,789.80, and the most actively traded futures jumped to the maximum value since August 5. At the same time, the intraday peak was the price of $1,791.30.
Yesterday, the quotes were helped to grow by concerns about the active spread of the delta variant of coronavirus. The incidence statistics are again not encouraging and cause concern about the next wave of COVID-19 in the world.
The tightening of quarantine measures in a number of countries may lead to a new financial collapse, while many economies have not yet recovered from the large-scale crisis caused by the pandemic last year.
Against the background of the growing incidence of COVID-19 in America, analysts are lowering their forecasts for its economic growth one by one. This suggests that the Fed will stick to its current course for a long time and will not start curtailing the stimulus yet. This state of affairs is very beneficial for gold.
In recent days, the precious metal market has practically not reacted to the hawkish comments of the American regulator. In particular, investors ignored reports about the preparation of a specific plan to curtail incentives.
At this stage, the disappointing US economic data is putting more pressure on the quotes. Last Friday, bullion rose by 1.5% due to a drop in consumer sentiment in America to an almost 10-year low.
"Naturally, the worst sentiment reading in almost a decade turbo-charged the move, which is why gold exploded back above the $1,740-$1,760 resistance zone and now finds itself flirting with $1,800 once more," said Oanda analyst Craig Erlam.
The statistical data provided significant support to the yellow metal yesterday as well. On Monday, the quotes began to rise actively after the Federal Reserve Bank of New York published the Empire State Manufacturing index of manufacturing activity.
The report for August indicated that this month the indicator collapsed from a record July value of 43 points to 18.3. This is much lower than the predicted value. Economists had expected the indicator to decline to 29 points.
On the weak data, which undermined the dollar and the yield of 10-year US bonds, gold rose by more than 2% in the last two sessions.
On Tuesday morning, the main precious metal also continues its confident ascent. So, at the time of preparation of the material, bullion rose by 0.14%, or $2.4, and was trading at $1,792.25.
Today, the asset is growing due to the tense situation in the world, as well as in anticipation of the release of the next batch of statistical data from the United States. On August 17, the July report on retail sales in America will be published. According to economists' forecasts, the indicator for July may be less than the June value by 0.2%.
If the experts' expectations are met, gold will receive an additional incentive for further growth. In this case, the metal may rise in price in the short term to $1,836 and start moving to $1,878, says Chintan Karnani of Insignia Consultants.
At the same time, analysts draw attention to the fact that it will not be easy for bullion to overcome the psychological mark of $1,800, even despite the increased demand for safe-haven assets. After all, now there are not only positive factors on the precious metals market.
At this stage, the weak economic statistics of China and the agreement reached by the Federal Reserve on the beginning of the curtailment of the asset purchase program may exert downward pressure on gold pricing. This process can start in the fall, if the American economy still continues to recover.