Global gold under the pressure of American inflation; Is Ounce ready to drop more?

The global ounce of gold is under the pressure of US inflation and interest rate expectations and is facing a challenge to return to the upward path.

According to Ambassador Arjan, the global gold market is closed today, Saturday, October 25, 1405; Therefore, the price of an ounce on this day is evaluated based on the last rates recorded at the end of Friday trading. In the last trading of the week, each ounce of cash gold was in the range of 4,165 dollars, and its weekly performance indicated a drop of about 0.7%. Now the eyes of the market players are fixed on the beginning of next week's trading to determine whether the economic pressures of the past days will continue or buyers will enter the field to compensate for the price drop.

The most important factor that has affected the gold market in recent days is the concern about the continuation of inflation in America. Rising prices have put expectations about the Federal Reserve's monetary policy back into focus. If inflation remains at high levels, the possibility of maintaining interest rates in high ranges or even increasing them again can be strengthened; An issue that usually ends up being a loss for gold, because unlike bonds and interest-bearing deposits, this metal does not generate periodic income.

However, the relationship between inflation and gold prices is not always direct. On the one hand, rising inflation can boost demand for gold as a tool to preserve asset value, but on the other hand, if the Federal Reserve turns to a tighter monetary policy to contain price pressures, rising yields on interest-bearing assets can reduce gold's appeal. In the current situation, this conflict has caused traders to act more cautiously in determining the next direction of the market.

The US dollar is also one of the key variables in the ounce outlook. A weaker dollar usually benefits gold, as it makes the metal cheaper for non-US investors to buy. On the other hand, the strengthening of the dollar and the increase in the yield of treasury bonds can put additional pressure on the price. Therefore, at the beginning of next week's trading, the behavior of these two variables can provide an important clue of the strength of buyers and sellers.

If in Monday's trading, the concern about the increase in interest rates intensifies and the dollar is in a stronger position, there is a possibility of continued downward pressure on the ounce. On the other hand, the decrease in bond yields and the weakening of the dollar can help to improve the price. Of course, to confirm the return of gold to the upward trend, a partial price increase is not enough, and the market must be able to compensate for a part of the recent drop and stabilize at higher levels.

Geopolitical developments can still affect the behavior of investors. Rising political and economic tensions typically boost demand for safe-haven assets, but if these developments lead to further increases in energy prices and inflation, they may also change interest rate expectations at the same time. For this reason, gold's reaction to political and economic news depends on the general conditions of the market and how traders evaluate the consequences of that news.

Overall, the state of the global ounce on Saturday should be analyzed in the context of the market closing and based on the last trades on Friday, not as a result of new trades. Gold's weekly decline shows that concerns about US monetary policy are still one of the main obstacles to price growth, but the future path still depends on economic data and the reaction of financial markets in the new week. As trading reopens on Monday, the direction of the dollar, changes in Treasury yields and traders' fresh assessment of the Federal Reserve's policy will play an important role in determining gold's short-term trend.