The rise in gold prices and the strengthening of the US dollar limits gains

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Gold prices rose on Tuesday in the European market recording the second daily gains during the last five sessions, and this increase in prices today is supported by a relative improvement in levels of investment demand for safe assets, especially gold and silver, especially amid the decline of risk appetite of investors in the markets However, gains remain limited as the US dollar advanced against a basket of major currencies, which hit a three-week high.

By 10:35 GMT, gold rose 0.2% to trade at 1190.35 US dollars an ounce from the opening level of $ 1188.54 and hit a high of $ 1194.75 and a low of $ 1188.44.

The precious metal ended yesterday’s trading, shedding 0.25%, marking the third daily loss in the last four sessions, due to the strength of the performance of the US currency against the majority of major currencies and secondary.

During the month of September, gold prices recorded a 0.8% decline, marking the sixth consecutive monthly loss in the longest losing streak in more than 20 years. This recent drop in prices is under pressure from the slow pace of investment demand on assets This is in addition to the acceleration of buying the US currency as the best alternative investment.

For the same reasons gold prices fell 4.9% over the third quarter of this year, recording their second consecutive quarterly loss.

It should be noted that this rise in gold prices today comes as a result of the relative improvement in levels of investment demand for safe assets, especially amid the decline in risk appetite of investors in the financial markets, which was reflected by the decline of the majority of Asian stock markets and the decline in stock indices in Europe, which recorded the lowest levels in Two weeks ago, this came amid increasing concerns about Italy’s budget and the likelihood of its rejection from the European Union.

On the other hand, the US dollar rose during the day by more than 0.4%, continuing its gains for the fifth session in a row, thus recording a three-week high of 95.35 points, reflecting the continued strength of the US currency against the majority of other major currencies, Which negatively affects the price of gold being priced in dollars and because of the inverse relationship between them.

The recent rally in the US currency is supported by the possibility of a tightening of the Federal Reserve’s monetary policy at a gradual pace in light of the strong growth of the world’s largest economy. The US central bank raised US interest rates last week for the third time this year.

Gold holdings in SPDR Gold Trust, the world’s largest gold-backed fund, fell yesterday by 2.06 mt to a total of 740.17 mt, the lowest level since 19 February 2016.

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