WebProNews

Gold Prices: Hong Kong To The Rescue?

Written by

in

Much of the recent fluctuation in gold prices was blamed on the improving American economy.

The changing economic landscape in the United States is considered key for determining the long-term market value of the precious metal

As such, gold suffered a drop in value as the US dollar strengthened; there is also the expectation that interest rates are due to rise in the near future.

Despite the heavy focus on the American economy, the precious metals market was recently affected by the perceived political instability in Hong Kong.

Thousands of pro-democracy supporters engaged in violent clashes with police on Sunday. They have occupied much of the financial center of Hong Kong, the sheer numbers bringing traffic to a halt in certain locations.

These individuals are fighting what they feel is communist encroachment and will not budge until they are assured their message is heard.

While the protesters may not be moving, the same cannot be said for stock prices. Hong Kong’s market saw two percent of its value shaved off as a result of wariness surrounding ongoing protests.

This uncertainty recently crept into the global market. American stock futures were lower during pre-market trading on Monday. European shares were also negatively affected.

As for gold, it received a slight reprieve as the price (for now) rose to $1,217.50 per ounce, up a total of $2.10. Meanwhile silver dropped by three cents to $17.55.

Beyond Hong Kong protests possibly offering a boost, it’s also hoped that the “Golden Week” holidays in China will also lend a hand to gold prices.

The problem is that it has been noted that the demand for gold in China is down overall. Even with the positive effect the situation in Hong Kong has had on the value of gold, it’s expected to continue a slow downward slide in value.

Stateside, the growing economy and strengthening dollar aren’t the only economic factors driving gold prices down. There is much speculation surrounding the upcoming jobs report data to be released later in the week.

The view of gold, even with its short term gains, continues to be somewhat bearish.

More posts