The global inflation increase became a main supporter for gold prices raise a day ago. United States yield obligation and US dollar was also increasing, but the price of gold was still rocketing. 

It woke up from it’s significant decline yesterday. Before, the XAU / USD pair jumped by 0.59% to the range of $1847.60. It happened in the last Wednesday trading session at night. 

The spot of this precious metal rose by 0.3 percent and reached the level of $1842.83 per ounce. The different thing occured in Comex New York where the future gold price slumped by 0.1%.

It came to the area of $1846.50. The newest data showed that Eurozone inflation which was rocketing in May was beyond the expectation. US dollar increased exceed the zero and some other currencies. 

The Gold Demand is Still Stable

The whole condition above happened amidst the issue of inflation. However, the interesting thing is that the gold demand isn’t Reduced at all. The numbers remained stable. 

The reason is that this precious metal is still a good which has a role as a protector due to inflation. The main topic in the market Is still about a concern of inflation happened lately. 

It is possible that this situation will still become a back ground of market movement and triggers a little bit purchase desire raise. That was based on an opinion said by Jim Wyckoff from Kitco. 

People have seen short covering in the future market and a little bit bargain hunting in a cash sector. That was after the last selling pressure 

Gold Bullish Hallowed by the Next Interest Rate Increase 

What happened next is that the investors who want to focus on the Non Farm Payroll or known as NFP. For your information, NFP and America’s inflatin are the data which have a huge role. 

It is especially for the continuity of monetary tightening Done by the Fed right now. Market is expecting that the US central Bank will still raise their interest rate up to 0.5% this month and on July. 

That high rate hike can be a large obstacle for gold bullish. The raise made by central Bank and the Fed, has a possibility to support the United States dollar and makes it is stronger. 

That is why; it may make the gold ownership cost is more expensive than before. In line with the time flyinh, people predicted that the Gold price will be back to take a lower trend sign. 

Euro Was Slumped in the Market

This trend is usually caused by a real obligation yield raise. However, in the future maybe it will still be higher than a historical level. This was said by Standard Chartered in an occasion. 

Elsewhere , Euro was weakening and moved away from it’s highest level in a month. It was happened yesterday. However, the US dollar was stronger and lifted by an increasing treasury. 

The economists data from Eurozone displayed that the consumers inflation in that area was rising to their highest record. The index of USD closed in a stronger position by 0.2 percent to the area of 101.96.

That continued a strengthening which has been happened since Tuesday. Euro was 0.2% weaker than dollar and keep away from it’s highest level in one month period. 

Inflation is Still Having a Strong Role

The inflation data showed by Spain, Belgium, and Germany released on Monday has a strong role on this weakening. USD was better than it’s previous session, but the strengthening effort was not that sure. 

Market participants believe that The Fed will increase their interest rate again. The value is around 0.5% on this month and next month inline with the signs given by their representatives. 

However, the action taken ahead by this organization is still unclear. Next, the NFP data of America may give a further sign about the next action that will Be taken by Federal reserve.