Gold soars to almost a one-week high on a softer dollar on Thursday, following the release of the US Federal Reserve’s November meeting, indicating the possibility of a slower pace in interest rate hikes.
On Thursday’s closing bell, the US gold futures were higher by 0.50% to $1,754.30 per ounce.
The Fed’s meeting for November 1-2 policy was released on Wednesday, showing a substantial number of policymakers agreeing to the likelihood of slowing down the interest hikes.
With the dollar index lower by 0.2%, gold bullion has become less expensive for non-dollar buyers.
Despite being considered a hedge against inflation, gold was still hindered by the interest hike this year due to a higher opportunity cost for holding the non-yielding asset.
For the December meeting, the market expects the US central bank to deliver a rate increase of only 50 basis-point (bps), which was below the 75 bps fourth consecutive rate hike earlier this month.
Ghana Govt to Use Gold for Buying Oil
Ghana Vice President Mahamudu Bawumia stated on Thursday that they were working on a policy that would allow the use of gold for buying oil instead of USD reserves.
The Ghana government made the decision to address the decline of the nation’s currency due to USD demand by oil importers and diminishing foreign cash reserves.
According to President Bawumia, once the new policy is implemented by 2023, it could greatly reduce the depreciation of the nation’s currency and change the balance of their payments at a fundamental level.
The President further explained that by using gold, they could prevent the direct impact of exchange rate on the utility and fuel prices as domestic sellers’ reliance on foreign exchange for imports would be gone.
Although countries at times trade oil for other commodities and goods, the proposed policy was considerably uncommon as such deals mostly involve an oil-producing nation trading for non-oil goods instead of the opposite.