On Thursday, gold prices rose to their highest in two months, led by a weaker US dollar and higher expectations for an aggressive rate hike.
Gold futures for August delivery went up by 0.16% to $1,984.05 per troy ounce on July 20’s Asian afternoon session. Its spot price rose by 0.20% to $1,981.89 per ounce, closely hitting its highest since May 17.
Next week, the US Federal Reserve will decide about the rate-hiking cycle. Analysts said the lower dollar gives the yellow metal an advantage as it aims to reach the $2,000.00 value.
The US greenback index was trading at an almost 15-month low. On the other hand, the Chinese yuan jumped after authorities revised cross-border financing policies. Also, significant state-owned banks were witnessed selling dollars.
Besides, a weaker dollar boosts gold prices for overseas buyers as lower interest rates support the yellow metal.
Moreover, the bullion’s value increased by 5.00% since June ended after hitting three-month lows. The recent price gains were mainly led by US economic readings, showing the Fed raising rates by 25 basis points. It would be the last increase of the tight cycle.
According to experts, anticipating the end of the Fed’s interest rate hikes led to the price movement of gold. For them, rates will remain high, and reversal of monetary policies would not occur immediately amid the US economy’s resilience.
Dubai Gold Gained from Expected Rate Hike Pause
The expectations for a pause in the interest rate hike from the Federal Reserve pulled up gold prices in Dubai.
Also, the bullion’s 24K variant jumped by Dh1.00 per gram on Thursday to cross Dh240.00 at the market’s opening.
Moreover, the Dubai Jewelry Group data showed price movements for their other variants. Their 22K, 21K, and 18K variants traded at Dh222.50, Dh215.25, and Dh184.5 a gram, respectively.
In India, the value of physical gold in yellow metal markets in Delhi-NCR costs around Rs61,300.00 per 10 grams. On the other hand, their silver was priced at Rs78,500.00 per kilogram.
Additionally, the dollar index’s softness led the bullion’s trading in the green as the US currency traded with negative bias.