Here’s what you need to know on Monday, December 22:
gold The pair is gathering bullish momentum during the holiday-shortened week and is trading at a new record high above $4,400. The economic calendar will not provide any high-level data on Monday, allowing investors to react to changes in risk perception.
US dollar price last 7 days
The table below shows the percentage change in the US Dollar (USD) against the major currencies listed in the last 7 days. The US dollar was the strongest against the Japanese yen.
| US dollars | euro | GBP | JPY | Canadian | Australian dollar | New Zealand dollar | Swiss franc | |
|---|---|---|---|---|---|---|---|---|
| US dollars | 0.21% | -0.10% | 0.99% | 0.18% | 0.28% | 0.52% | -0.14% | |
| euro | -0.21% | -0.30% | 0.76% | -0.03% | 0.09% | 0.31% | -0.35% | |
| GBP | 0.10% | 0.30% | 1.18% | 0.28% | 0.40% | 0.62% | -0.04% | |
| JPY | -0.99% | -0.76% | -1.18% | -0.79% | -0.69% | -0.47% | -0.91% | |
| Canadian | -0.18% | 0.03% | -0.28% | 0.79% | 0.10% | 0.34% | -0.17% | |
| Australian dollar | -0.28% | -0.09% | -0.40% | 0.69% | -0.10% | 0.21% | -0.44% | |
| New Zealand dollar | -0.52% | -0.31% | -0.62% | 0.47% | -0.34% | -0.21% | -0.66% | |
| Swiss franc | 0.14% | 0.35% | 0.04% | 0.91% | 0.17% | 0.44% | 0.66% |
The heat map shows the percentage changes in major currencies versus each other. The base currency is chosen from the left column, while the counter currency is chosen from the top row. For example, if you select USD from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Reports that Israel is planning to attack Iran due to growing concerns about Iran rebuilding nuclear enrichment sites and expanding its ballistic missile program prompted markets to adopt a cautious stance early Monday. Citing four former US officials familiar with the developments, NBC News reported that Israeli Prime Minister Benjamin Netanyahu is expected to meet with US President Donald Trump later this month to explain why they need to take military action against Iran again. After rising above 1% the previous week, gold turned north in the Asian session and was last seen trading at $4,405, up more than 1.5% on the day.
Meanwhile, US stock index futures are trading slightly higher after Wall Street’s major indexes closed in positive territory on Friday. US Dollar Index (USD). The pair is still in a consolidation phase above the 98.50 level after the recovery witnessed in the second half of last week. On Tuesday, the US Bureau of Economic Analysis will publish third-quarter GDP data.
EUR/USD It corrected lower after the rally in the first half of the previous week and closed in negative territory, snapping a three-week winning streak. The pair stabilized in the European morning on Monday and is trading in a narrow channel above 1.1700.
Rising tensions in the Middle East appear to be the reason oil Prices rise at the beginning of the week. At the time of writing, a barrel of WTI was up more than 1% on the day at $57.15.
The People’s Bank of China (PBOC) announced early Monday that it left its base interest rates on one-year and five-year loans unchanged at 3.00% and 3.50%, respectively. After achieving marginal gains on Thursday and Friday. Australian Dollar/US Dollar It is gaining momentum and trading near 0.6630 to start the European session.
GBP/USD It ended the previous week virtually unchanged despite choppy action that emerged in the immediate aftermath of the Bank of England’s policy announcements. The pair rose slightly early Monday and is trading near 1.3400.
USD/JPY It is correcting lower after rising nearly 1.5% on Friday and is trading in negative territory below 157.50.
Frequently asked questions about gold
Gold has played a major role in human history as it has been widely used as a store of value and a medium of exchange. Currently, apart from its luster and use in jewellery, the precious metal is widely viewed as a safe haven asset, meaning it is a good investment during turbulent times. Gold is also widely viewed as a hedge against inflation and currency depreciation because it is not dependent on any specific issuer or government.
Central banks are the largest holders of gold. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and purchase gold to improve the perceived strength of the economy and the currency. High gold reserves can be a source of confidence for a country’s solvency. Central banks added 1,136 tons of gold worth about $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest annual purchase since records began. Central banks in emerging economies such as China, India and Turkey are rapidly increasing their gold reserves.
Gold has an inverse relationship with the US dollar and US Treasuries, which are major reserve assets and safe havens. When the value of the dollar declines, gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rise in the stock market tends to weaken the price of gold, while a sell-off in riskier markets tends to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession could cause the price of gold to rise rapidly due to its safe-haven status. As a lower-yielding asset, gold tends to rise as interest rates fall, while a higher cost of money usually negatively impacts the yellow metal. However, most of the moves depend on how the US Dollar (USD) behaves as the asset is priced in Dollars (XAU/USD). A stronger dollar tends to keep the price of gold in check, while a weaker dollar is likely to push gold prices higher.
