Gold Prices Surge to Nine-Week High
Introduction
Gold prices surged to their highest level in nine weeks today, Thursday, thanks to dollar weakness and bets that the Federal Reserve (US central bank) may soon stop the rate hike cycle.
By 0325 GMT, spot gold was up 0.5% to $1987.18 an ounce, the highest level since mid-May, while US gold futures rose 0.4% to $1988.80.
“It is likely that we will reach the end of the Fed’s rate hike at the next meeting of the Federal Open Market Committee (July 26),” Baden Moore, head of carbon and commodities strategy at the National Bank of Australia, told Reuters.
Impact of Low Interest Rates
Low interest rates help gold because they reduce the opportunity cost of holding unprofitable bars.
The dollar index fell 0.2%, nearing its lowest level in more than a year, making gold cheaper for holders of other currencies.
The US central bank is expected to raise interest rates by 25 basis points at its meeting next week to keep them in the 5.25-5.5% range in 2023, according to the CME Fed Watch tool.
In other precious metals, spot silver rose 0.3% to $25.23 an ounce, platinum rose 0.1% to $973.81 and palladium shed 0.2% to $1,305.54.
