The reason for the rise in gold prices in local markets with the noticeable decline in the dollar exchange rate against the dinar.
Saleh told {Al-Furat News} agency, “It is observed at the level of the local market in our country that the dollar in the secondary market is gradually declining relative to the official exchange rate. Despite this, we find that there is a gradual rise in the price of gold in the local market.”
He stated, “Gold is imported today and its imports are financed at the fixed official exchange rate of the dinar against the dollar through the Central Bank platform and at the rate of 1,320 dinars per dollar.”
Saleh explained, “Due to geopolitical tensions around the world, especially the war in Ukraine and others, they have brought about major developments in the gold hedging policy on the part of some central banks in the world, which constituted an unprecedented rise in global demand for gold and led to a rise in its prices in the world.” Global markets, and here it is noted that the external factor is the basis for the rise in the price of an ounce of gold in the local market.”
He continued, “International financial institutions have issued expectations about the continued rise in gold prices in the coming months, and the expectations come despite the current strength in the levels of the dollar, which is trading at its highest levels in 5 and a half months according to the dollar index, in addition to the high US government bond yields at the highest level in the world.” 5 months in light of expectations that the US Federal Reserve is on its way to keeping interest rates high for a longer period of time, which is supposed to represent negative pressure on gold prices.”
Saleh added, “But the strength of global demand for gold as a safe haven in light of the current geopolitical uncertainty, coupled with expectations that global central banks will continue to increase their gold reserves, has led international financial institutions to expect further gains in gold prices during the remainder of 2024.” .
He pointed out, “For example, the German Deutsche Bank raised its forecast for gold prices in 2024 to the level of $2,400 per ounce, and expected the price of gold to rise to $2,600 per ounce at the end of 2025. Likewise, the American Citibank Corporation expected the price of gold to reach $3,000.” per ounce in the period from the next 6 to 18 months, with gold breaching the level of $2,500 per ounce during the second half of 2024.”
He went on to say, “There is news circulating in global markets about an international group launching its central banks digital currencies denominated in gold to conduct commercial exchanges outside the currencies currently in place in the global monetary system, including China, Russia, and some countries in Africa, Asia, and Latin America. This is a trend that requires high hedging with gold, which has been formed.” The other is an unprecedented wave of demand for the yellow metal globally.”
He said, “But we see from our point of view that adopting a global gold reserve system at global market prices for the yellow metal will make the demand for gold grow and rise with the growth of trade and the global economy, and if countries continue to hedge their reserve currencies with gold at open gold prices that are restricted by production and the limited global supply of gold in the face of open demand.” “It will generate a monetary system with a high exchange rate, which may hinder its commercial competitiveness as countries that are hedged with gold and whose exchange rates are determined by the yellow metal.”
He noted that “unless these groups adopt a fixed, moderate and competitive official price for gold itself, their competitive capabilities in their international trade with the countries of the world will be inevitably threatened, and here gold will be a double-edged sword. At the same time, one should be wary of commercial gold policies in establishing a monetary system on its own, and finally and until… On May 11, 2024, an ounce of gold, which weighs 31 grams, rose to reach about $2,361 per ounce in global markets.
alforatnews.iq
