Gold’s down slide continues drastically in the current week, with the precious metal being oversold, drifting away from markets interest due to various reasons.
Gold prices dropped to six-month low on Thursday, forced down by a continuous strengthening dollar and by comments from the U.S. Federal Reserve Chair confirming additional interest rate hikes in the United States. Moreover, rate hikes are a not so pleasant event for Golds price, as investor’s attention could turn to more interest rate related assets that have more reaction and subsequently more potential for gains. Solid evidence is the obvious strengthening of the greenback against other major counterparts which make the bullion very expensive for the rest of the world with the resulting in major dampening.
In the meantime, the latest advancements on the trade war between the United States and China is affecting business confidence and could force central banks to demote their outlooks. Despite that, Gold prices, which usually advance in times of uncertainty, had the opposite effect so far this week, regardless of the ongoing trade war.
On another front and according to reports, Russia has reduced its investments in US Treasuries nearly by half in April 2018 but has very notably increase it’s holding in the Bullion.