World gold continues to be sold off

At the closing session of February 27, the world gold price delivered by nearly 40 USD to 2,876 USD per ounce. During the session, the precious metal had a time to close to $ 2,865 – the lowest since mid -February. Early this week, the price of the 11th new peak, at $ 2,965, due to the increasing demand for shelter.

“The direction of gold is very clear. The short -term up and down and the semi -profit activity are normal developments in a cycle,” said Alex Ebkarian – A Allegiance Gold Career Director.

Jim Wyckoff – analyst at Kitco Metals also said that the market is under pressure from investors selling profit. On February 24, the price also dropped nearly 40 USD. A total of 3 sessions, gold lost nearly 80 USD per ounce.

Another cause of precious metal down is strong USD. Dollar Index increased by 0.7%, making gold more expensive for buyers in other currencies.

This week, investors waited for US key inflation figures, to have more clues about the interest rate decision of the Federal Reserve (Fed). Personal consumption index (PCE) – Fedic inflation measure of Fed – is announced today.

Investors are concerned that Fed is difficult to reduce interest rates. Therefore, if PCE increases too strongly, the psychology in the market will be more negative, Bart Melek – Director of Monetary Strategy at TD Securities said. The market is forecasted this year, the Fed reduces the reference interest rate at least 2 times, with a total of 55 basic points.

Ebkarian thinks that gold still has a strong position to surpass $ 3,000 per ounce in the next 1-2 months. This depends on the reaction of the market before the US import tax.

On February 27, US President Donald Trump wrote on the Truth Social social network that the intention to impose a 25% tax on goods imported from Mexico and Canada will take effect on March 4 as planned. On the same day, the United States will also impose an additional 10% tax on Chinese imports.