Gold is climbing higher due to the Dollar and security concerns

    Abdulaziz Sobh

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    Gold is climbing higher due to the Dollar and security concerns

    Gold prices hit their highest level in a week on Tuesday, supported by the dollar's decline as US economic data prompted investors to reassess the idea of a rate hike soon, as well as heightened security concerns after an explosion in Russia.
    By 10:14 GMT, spot gold rose 0.5 percent to $ 1259 an ounce, having hit its highest level since March 27 at $ 1260.09 an ounce.

    According to Reuters, the yellow metal jumped 0.6 percent in US futures to $ 1261.2 an ounce.

    The Federal Reserve raised interest rates in March and will hold its next meeting in May.

    Among other precious metals, silver futures rose 0.6 percent to $ 18.34 an ounce, after hitting a one-month high earlier at $ 18.376 an ounce.

    Platinum rose 0.2 percent to $ 953.06 an ounce and palladium 0.7 percent to $ 807.9 an ounce.

    What factors affect the rise in the price of gold?
    Gold experts, gold analysts, and experts explain the reasons for the rise in gold prices in five key factors, but first and foremost it must be clarified that gold, like any other commodity, is affected by the law of supply and demand, for example, gold prices will rise if demand for the metal increased with the stability or decline The supply or even the rise of less than the rise of demand, and vice versa of course true if increased supply in the case of demand stability prices will decline, but the problem here is the difficulty of facing the increase in demand for the metal increase the supply because the cost of production and extraction of gold increases significantly because of increased risk of drilling for Access to the site, the majority of which are located in remote areas and therefore the production of the metal does not cover the increased demand for it. For the major gold producers in the world, for follow-up drilling and extraction follow the equation of the ounce = 1000 US dollars, which is a high cost that complicates the issue.

    As for the five main factors behind the increase in global gold prices, the first and foremost is the decline in the US dollar (the world's main currency) and the increase in inflation in the United States (the world's most powerful economy undisputed), as the actions taken by the Federal Reserve (US Central Bank) to stimulate the economy to double the dollar.

    As it is known that the decline in the dollar exchange rate raises global gold prices, but nevertheless it is possible to fall or stabilize gold prices in the same period in euros (the single currency in Europe), for example, for example, the prices of gold during the summer and autumn of 2010 had depreciated in dollar terms but remained stable over the same period in the Japanese yen and the euro.


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