Are the Gold Prices Set to Rally?
For the second day in a row, gold prices have marked modest gains, in an attempt to recover from the commodity’s weak performance over the past few weeks.
The price per ounce for gold jumped to $1,223 as the market begins to correct itself. Gold had been trading poorly since late April, after a strong surge sent the prices rising earlier in the month.
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Much of gold’s success in the time before its steep tumble had been based on deteriorating political stability across the globe. From French elections that had the potential to upset the balance of power in the European Union (EU) to multiple military actions undertaken by the United States, both as a form of deterrence as well as—in the case of Syria—direct military conflict, the political crises that were flaring up spurred interest in the yellow metal.
Since that time, however, political tensions have eased in many areas, and many of the analysts’ fears have subsided, or at least have been assuaged for the time being. Though at times the situation looked dire, the biggest fears of the market were not met, as the U.S. has both withheld from further attacks on the Syrian government and has yet to engage in direct military action against nuclear-armed North Korea.
Gold prices suffered as a result of the flattening concern, though the price drop has now been slightly corrected, with two days of modest gains for the precious metal.
The next major hurdle for gold prices (barring any unforeseen event taking place) will come in June, when the U.S. Federal Reserve is universally believed to be raising interest rates. Such a move will spark investment in the U.S. dollar and hurt gold value, as the commodity traditionally holds an inverse relationship with the Greenback.
