| Why Positive Outlook on the US Dollar Is Negative for Gold | |
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Is This the Right Time to Buy Gold? (Continued from Prior Part) US dollar
Tracked by the Federal Reserve, the weekly US Dollar Index (UUP) measures the value of the dollar compared to its six significant trading partners—the euro, Japanese yen, British pound, Canadian dollar, Swiss franc, and Swedish krona. A rising value means that the dollar is stronger compared to other currencies and vice versa.
The expectations of a Fed rate hike this year are keeping the US dollar buoyant. In the latest move, China devalued the yuan on August 11 and then again on August 12. This pushed the US dollar even higher. China described the devaluation as a “one-off depreciation.” This pushed the yuan to the lowest level against the US dollar in almost three years.
Positive outlook
The Fed will likely take a more gradual approach at rising interest rates. However, its stated policy of rate hikes either this year or next year is in contrast to loosening monetary policy elsewhere, especially in Europe and Japan. In contrast, commodity price weakness is impacting commodity-producing countries’ currencies, including Australia and Canada. China’s recent moves will put more pressure on commodity producer countries’ currencies. This is expected to add to the strength of the US dollar.
US dollar and gold
Dollar-denominated assets, including gold, are influenced by the dollar’s strength. A strong US dollar is negative for gold and vice versa. The current strength in the US dollar is also putting pressure on gold prices.
As a result, it’s important to track the direction of the dollar. This can point you towards the direction of gold prices (GLD) and gold stock prices like AngloGold Ashanti (AU), Gold Fields (GFI), and Agnico Eagle Mines (AEM). The US dollar also influences funds like the Market Vectors Gold Miners ETF (GDX). Together, these three companies contribute 11.90% towards GDX’s holdings.
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PRODUCER |
CODE : AU |
ISIN : US0351282068 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
AngloGold is a gold producing company based in . AngloGold produces gold, copper, silver and zinc in Argentina, in Australia, in Brazil, in Canada, in Ghana, in Guinea, in Mali, in Namibia, in South Africa and in Tanzania, develops gold and iron in Australia, in Brazil, in Colombia, in Congo Dem. Rep. of and in South Africa, and holds various exploration projects in Philippines. Its main assets in production are CRIXÁS, MINERAÇÃO, SAO BENTO, ANGLOGOLD ASHANTI MINERAÇAO and CRIXAS MINE in Brazil, SUNRISE DAM GOLD MINE in Australia, NAVACHAB MINE and NAVACHAB in Namibia, YATELA, MORILA and SADIOLA in Mali, CERRO VANGUARDIA in Argentina, MPONENG (WESTERN DEEP NO. 1 SHAFT), TAUTONA (WESTERN DEEP NO.3 SHAFT), BAMBANANI, TAU LEKOA, MPONENG, SAVUKA, TAU TONA, GREAT NOLIGWA, KOPANANG and CRIPPLE CREEK & VICTOR (CRESSON MINE) in South Africa, SIGUIRI in Guinea, TEBEREBIE, IDUAPRIEM, OBUASI and KUBI in Ghana, GEITA in Tanzania and TROUT LAKE MINE and CALLINAN MINE in Canada, its main assets in development are MOAB KHOTSONG in South Africa, MINAS-RIO in Brazil, LA COLOSA and GRAMALOTE in Colombia, KIBALI (KILO-MOTO) in Congo Dem. Rep. of and TROPICANA in Australia and its main exploration properties are HUALATAN and ER in Peru, MKURUMU in Tanzania, 777 PROJECT and RIVARD in Canada, LOUBOUGOULA, GOODPASTER and ALAMOUTALA (SADIOLA II) in Mali, BAMBADJI in Senegal, MORRO VELHO in Brazil and SIANA in Philippines. AngloGold is listed in Australia, in Germany and in United States of America. Its market capitalisation is US$ 9.3 billions as of today (€ 8.7 billions). Its stock quote reached its lowest recent point on November 23, 2018 at US$ 10.00, and its highest recent level on April 25, 2024 at US$ 22.78. AngloGold has 409 109 984 shares outstanding. |