Gold Price Analysis for June 2018
Gold has been an important player in shaping the economic life of myriads of cultures worldwide. Its preference as an investment tool dates back to thousands of years. In fact, ancient cultures valued gold so much that they buried their dead along with their gold possessions trying to help them in the afterlife. Currently, societies have seemingly become more sophisticated and so has the uses of gold. Gold is an excellent investment asset. Investors love it for its hedging capabilities during times of financial turmoil and the fact that its price is less volatile compared to other assets, among other aspects. Families are fond of it as it can be passed down as an inheritance from one generation to another. Gold has found tons of uses in modern day life emanating from its many properties. For example, gold doesn’t corrode, and it is highly ductile, and a great conductor of heat and electricity, it can even shield against radiation, and also has various medical and health benefits. Gold can be used in the circuitry of many gadgets and devices such as mobile phones, and is often used in space. Gold is used in windows on skyscraper buildings and on the visors of astronaut helmets to protect them from harmful ultraviolet rays from the sun. Gold’s performance in 2017 was quite impressive despite the unfavorable environment brought about by the cryptocurrency frenzy.
Price Performance in the Month of June 2018
The gold spot price took a dip at the beginning of the month hitting a new low of about $1,294 per ounce after the release of US employment data. The data showed that the employment economy was much stronger than it was expected to be. It showed that about 223,000 jobs had been added which went way above the 188,000 expectation. With gold being highly sensitive to rising interest rates, it’s no surprise that the price hit a new low below the $1,300 per ounce mark. The US also went ahead and imposed tariffs on aluminum and steel imports from Canada, Mexico, and the European Union. While this may seem that it may benefit the gold price in case a trade war ensues, there is a chance that the interest rate hike by the Federal Reserve this month will maintain the price below the $1,300 per ounce threshold.
Price Performance between June 4th and June 8th
In the week beginning on June 4th, gold’s spot price was reported at $1,293.80 per ounce. The prices traded within a narrow range on Monday as concerns of a trade war between the US and other countries still lingered. Gold is considered a safe haven during times of economic and political turmoil. However, political tensions in Italy and Spain had simmered down. During the course of the week, the gold price slightly gained, fully supported by a weaker dollar. It continued to gain also as investors anticipated the Fed meeting on June 12th. A weak dollar is attractive for investors as it makes gold cheaper for purchase using other currencies and fuels demand. The week ended on June 8th with the gold spot price at $1,298.10 per ounce.
Price Performance between June 11th and June 15th
In the week beginning on June 11th, the gold spot price was at $1,298.90 per ounce which showed gains ahead of the Federal Reserve meeting and the U.S and N. Korea summit. Investors were on the fence regarding the outcome of the Fed meeting taking place on June 12th. The U.S. President Donald Trump was scheduled for a meeting with N. Korea’s leader Kim Jong-Un in Singapore to discuss how to denuclearize the Korean peninsula. Gold prices dipped as investors braced for the Fed meet-up as the outcome of the Singapore summit did little to neutralize the gold price situation. Gains were erased as the Fed hiked interest rates by a quarter percent point. As of June 15th, the price of gold had tumbled to a 3-week low of $1,274.60 per ounce showing no signs of crossing the 1,300 level.
Price Performance between June 18th and June 22nd
In the week beginning on July 18th, gold started off with a spot price of $1,276.20 per ounce. This was the steepest decline since November 2016. During this week, Washington threatened to impose more tariffs on about $200 billion Chinese goods. Beijing retaliated by threatening to impose tariffs on about $50 billion U.S. goods. This triggered a loss on the gold spot price as the dollar skyrocketed. Gold failed to surpass the $1,300 threshold which led to investors liquidating their long positions. At the end of the week, the gold spot price had fallen to a new low of $1,267.40.
Price Performance on June 25th
On Monday, June 25th, the price of gold continued much lower. It was weighed down by a strong U.S. dollar. The price hit a 6-month low, which triggered investors to flock to U.S. treasuries rather than gold bullion. Higher interest rates and concerns of a global trade war intensified after a report revealed that the U.S. plans to bar Chinese companies from investing in U.S. technology firms. However, some experts still remain optimistic that the trade stand-off between China and the U.S. may soon fall, to the benefit of gold. However, at the moment, interest rates remain higher which discourages the purchase of non-interest paying bullion which is priced in USD.
Despite the low prices this month, mostly affected by tension triggered by trade war worries and hiked interest rates, gold is expected to return to its normal range of about 1,300 per ounce as we edge closer to the Q3 of 2018. Blockchain technology, on the other hand, is making tremendous steps forward as major cryptocurrencies plan to roll out different upgrades. There is also a significant amount of investment in blockchain as the current total amount of cash raised in ICO campaigns has surpassed last year’s total. Our DinarCoins, gold and blockchain-based digital assets, offer an alternative way to help your personal finances be more flexible and diverse by offering many of the same benefits as those of physical gold and of cryptocurrencies. Be sure to check out how you can invest in our DinarCoins on our main website.