The significant increase in the price of gold this morning is attributed to the economic weakness in Europe, which has supported gold to reach a level of $1921.
After the release of PMI data, some experts believe that the European Central Bank (ECB) may halt interest rate hikes from September onwards in order to revive production.
If ECB does indeed stop raising interest rates, it will help depreciate the currency. Along with a decrease in currency value, sluggish economic growth has led investors to be concerned about high risks. Therefore, they have increased their purchases of gold as a risk aversion strategy.
After the release of PMI data, some experts believe that the European Central Bank (ECB) may halt interest rate hikes from September onwards in order to revive production.
If ECB does indeed stop raising interest rates, it will help depreciate the currency. Along with a decrease in currency value, sluggish economic growth has led investors to be concerned about high risks. Therefore, they have increased their purchases of gold as a risk aversion strategy.
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Short-term treasuries currently offer yields around 5%, which is significant competition for gold.
