Ukraine, Iraq and the Fed contribute to higher gold prices

Ukraine, Iraq and the Fed contribute to higher gold prices

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Ukraine, Iraq and the Fed contribute to higher gold prices

Gold prices rose sharply after the Fed meeting – statement by the Chairman Janet Yellen caught unawares many traders. Gold Prices for the August contract, the most actively traded, up 3.3%. This is the strongest growth since the day last September. Price per troy ounce increased by $ 41 and broke the psychologically important level of $ 1,300, the market received a new impetus to growth. Output prices above the 50-day and 100-day moving average has given a signal to buy the set of investors who follow the technical indicators.

According to RBC TV, Fed Chairman Dzh.Yellen at a press conference confirmed that long rates will remain low. Many traders put on a more assertive rhetoric that would have a negative impact on gold. Having heard about the low rates they rushed to buy the metal to minimize their losses – this explains the sharp rise in prices. It began with the closing of short positions, and then joined by other investors. When gold prices begin to grow – people are afraid to miss the traffic.

As pointed out by RBC TV, gold prices also receive support from the conflicts in Iraq and Ukraine. In terms of geopolitical uncertainty, many investors buy gold as a tool for saving capital. Since the price of gold reached an annual minimum 3 June, they rose by 6%. But they are still below the maximum established in March – 1392 U.S. Some analysts believe that the rise in gold prices will be short-lived. Now even if the Fed rhetoric was softer than expected, long-term trend remains the same – the reduction of incentive programs and the subsequent tightening of monetary policy, and it is negative for gold.

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