Gold Recovers from Weekly Low Amid Dollar Decline
Gold rose more than 1%, recovering from its weekly low as the dollar weakened and interest rate hike expectations were reassessed.
Translated by Qiyas from الراي — Original source
Gold prices rose by more than one percent on Thursday, recovering from their lowest level in a week recorded in the previous session, as the US dollar retreated and investors reassessed the likelihood of a US interest rate hike this month following a report indicating rising inflation.
By 02:57 GMT, spot gold prices had risen 1.3 percent to $4,158.63 per ounce, after hitting their lowest level since October 7 on Wednesday.
The US dollar retreated after reaching an 18-month high overnight. A weaker dollar makes the US-dollar-denominated precious metal less expensive for holders of other currencies.
Kyle Roda, chief financial markets analyst at Capital.com, said, “What we are seeing here is merely a symptom of a market uncertain about US interest rate policy, which is leading to some volatility.”
Roda added, “We are approaching a critical level for gold, just below $4,000. If we see some truly strong data again, there will be a view that the Federal Reserve will have to raise interest rates relatively urgently, and that will become the focal point.”
US consumer price inflation accelerated in September, driven by a sharp rise in gasoline costs.
Mary Daly, president of the Federal Reserve Bank of San Francisco, said the US central bank will likely need to increase short-term interest rates further, but indicated that there is no need to raise rates at the meeting scheduled for September 27–28.
Although gold is viewed as a hedge against inflation, higher interest rates reduce its appeal because it does not generate yields.
In other precious metals, spot silver rose 1.1 percent to $56.26 per ounce, platinum gained 0.3 percent to $1,611.15, and palladium rose 1.3 percent to $1,107.83.
