International Gold Prices Rise on Weak Dollar and Geopolitical Tensions
Kitco News
March 8, 2023
Gold prices climbed higher on Tuesday, supported by a weaker U.S. dollar and ongoing geopolitical uncertainty.
The spot gold price traded at $1,950.30 per ounce, up 0.9% on the day. U.S. gold futures for April delivery settled up 0.9% at $1,953.30.
The U.S. dollar index, which measures the greenback’s value against a basket of six major currencies, fell 0.4% on Tuesday, making gold more attractive to buyers holding other currencies.
Geopolitical tensions also supported gold prices. The ongoing conflict in Ukraine and the escalating tensions between the United States and China over Taiwan have increased demand for the safe-haven metal.
“Gold is benefiting from the safe-haven bid as investors seek shelter amid the geopolitical uncertainty,” said Daniel Ghali, commodity strategist at TD Securities.
Analysts also pointed to technical factors, noting that gold has broken above key resistance levels in recent sessions.
“Gold has broken above its recent highs, and this is attracting technical buyers,” said Ole Hansen, head of commodity strategy at Saxo Bank.
However, some analysts cautioned that the rally in gold may face headwinds in the near term.
“The medium-term outlook for gold is still bullish, but we could see some short-term profit-taking after this recent rally,” said Ghali.
Technical Analysis
Kitco senior technical analyst Jim Wyckoff said that gold bulls have the near-term technical advantage.
“The gold bulls have gained near-term technical power as the bulls have pushed prices above the December highs,” Wyckoff said.
“The next upside price objective for the bulls is to produce a close above the resistance line at $1,976.80,” Wyckoff added.
Looking Ahead
Analysts will be watching key economic data releases this week, including the U.S. inflation report on Tuesday and the U.S. jobs report on Friday.
“If inflation continues to come down and the Fed signals a less aggressive interest rate policy, that will support gold prices,” said Ghali.
“However, if the jobs report shows that the labor market remains strong, this could lead to higher interest rates and weigh on gold,” he added.
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