Gold Price Today, 21 July 2023: Gold prices slipped on Friday as the dollar rebounded to its highest in more than a week after positive weekly U.S. jobs data renewed uncertainty over whether the Federal Reserve will stop raising interest rates after an expected increase next week.
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Spot gold (XAU/USD) slipped 0.4% to $1,962.09 per ounce by 0937 GMT, but was set for a 0.4% rise this week. U.S. gold futures (Yellow Metal) dropped 0.3% to $1,964.20.
Central Bank Expected
The U.S. central bank is widely expected to raise rates by 25 basis points on July 26, 2023 and expectations the increase would be its last had driven gold to its highest in about two months on Thursday and set it on track for a third weekly rise.
“If the Fed lends credence to market expectations for no further rate hikes after this month, that may help bullion bulls reclaim the $2,000 handle,” Exinity Chief Market Analyst Han Tan said.
“However, if the Fed pours cold water on the notion that its rate hikes are coming to an end, that could prompt bullion to unwind some of its recent gains and falter back into the mid-$1,900s.”
The dollar index (DXY) was at its highest since July 12 after an unexpected fall in U.S. weekly jobless claims boosted bets that the Fed would keep interest rates higher for longer.
Interest Rates
A stronger dollar hurts gold because it makes bullion more expensive for buyers using other currencies, while higher interest rates are gold negative as they shore up bond yields, increasing the opportunity cost of holding non-yielding bullion.
Gold Failed to break Resistance
Gold’s failure to break resistance at $1,985 is likely to be followed by a deep correction or a resumption of the downtrend from $2,072.19, said Reuters technical analyst Wang Tao.
Among other metals, spot silver (XAGUSD) eased 0.1% to $24.71 per ounce, having hit its highest since May 11 in the last session.
Source: Reuters
