Gold secured a weekly gain as gold consist
The US dollar experienced its first weekly decline in two months, providing support to the price of gold. Gold managed to maintain its position above $1,900 per ounce and recorded a slight weekly gain.
The most active gold futures contract on the New York Comex, set for December, closed at $1,946.20 per ounce, marking a daily increase of $13.30 or 0.7%. Over the week, this benchmark gold futures contract saw a modest rise of $3.50 or 0.2%.
The spot price of gold, which briefly reached as high as $1,930.90 per ounce on Monday, was trading at $1,924.22 by 13:55 ET (17:55 GMT). This left spot gold, which is determined by real-time trading in physical gold, up by 0.4% for the week.
Spot gold's ability to stay above the $1,900 level came into focus this week following a second consecutive month of higher-than-expected readings for the US Consumer Price Index (CPI). These readings raised concerns about inflation and the possibility of the Federal Reserve implementing more aggressive interest rate policies.
Global markets are adjusting to a new outlook regarding interest rate hikes, especially after the European Central Bank raised rates to a record high of 4% and indicated that this might be their last hike.
Market participants are eagerly awaiting the Fed's stance on inflation. It is not expected that the Federal Reserve will raise rates at their upcoming meeting on September 20, especially after implementing 11 rate hikes that increased the base rate from 0.25% to 5.25% by February 2022. However, the statements made by Chairman Jerome Powell during his news conference will be closely monitored for clues regarding the Fed's plans for the remainder of the year, especially considering two more policy meetings are scheduled for November and December.
While a Fed rate hike appears unlikely at the moment, some investors in the dollar remained cautious, while others took profits from the dollar's recent eight-week rally. This led to an increase in the price of gold as a hedge against economic uncertainties.
Ed Moya, an analyst at online trading platform OANDA, noted, "Gold prices are rising as risk aversion increases, driven by growing pessimism in Europe. The key factor for gold is a retreat in global bond yields, which may not happen until we move past the central bank events next week, signaling that tightening measures are largely complete for advanced economies."
In August, US consumer prices increased for the second consecutive month, resulting in a year-on-year growth of 3.7% compared to 3.2% in July. This increase was primarily driven by rising gasoline prices, accounting for more than half of the overall rise, which could add pressure on the Fed's efforts to control inflation. The central bank's target inflation rate remains at a maximum of 2% annually, and they have committed to achieving this through further interest rate hikes if necessary.
The most active gold futures contract on the New York Comex, set for December, closed at $1,946.20 per ounce, marking a daily increase of $13.30 or 0.7%. Over the week, this benchmark gold futures contract saw a modest rise of $3.50 or 0.2%.
The spot price of gold, which briefly reached as high as $1,930.90 per ounce on Monday, was trading at $1,924.22 by 13:55 ET (17:55 GMT). This left spot gold, which is determined by real-time trading in physical gold, up by 0.4% for the week.
Spot gold's ability to stay above the $1,900 level came into focus this week following a second consecutive month of higher-than-expected readings for the US Consumer Price Index (CPI). These readings raised concerns about inflation and the possibility of the Federal Reserve implementing more aggressive interest rate policies.
Global markets are adjusting to a new outlook regarding interest rate hikes, especially after the European Central Bank raised rates to a record high of 4% and indicated that this might be their last hike.
Market participants are eagerly awaiting the Fed's stance on inflation. It is not expected that the Federal Reserve will raise rates at their upcoming meeting on September 20, especially after implementing 11 rate hikes that increased the base rate from 0.25% to 5.25% by February 2022. However, the statements made by Chairman Jerome Powell during his news conference will be closely monitored for clues regarding the Fed's plans for the remainder of the year, especially considering two more policy meetings are scheduled for November and December.
While a Fed rate hike appears unlikely at the moment, some investors in the dollar remained cautious, while others took profits from the dollar's recent eight-week rally. This led to an increase in the price of gold as a hedge against economic uncertainties.
Ed Moya, an analyst at online trading platform OANDA, noted, "Gold prices are rising as risk aversion increases, driven by growing pessimism in Europe. The key factor for gold is a retreat in global bond yields, which may not happen until we move past the central bank events next week, signaling that tightening measures are largely complete for advanced economies."
In August, US consumer prices increased for the second consecutive month, resulting in a year-on-year growth of 3.7% compared to 3.2% in July. This increase was primarily driven by rising gasoline prices, accounting for more than half of the overall rise, which could add pressure on the Fed's efforts to control inflation. The central bank's target inflation rate remains at a maximum of 2% annually, and they have committed to achieving this through further interest rate hikes if necessary.
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Gold acts as prediction.
