Investing.com – The yellow metal extended its gains for the fourth consecutive session, which comes at the expense of a weak dollar, due to market expectations of a slowdown in raising the federal interest rates.
During today’s trading, gold prices jumped to their highest levels since April 2022, which is the highest in 9 months, while the dollar fell to its lowest level in 9 months.
The prices of the yellow metal rose in futures contracts during these moments of today’s trading to levels near $ 1942, with gains in the range of $ 13 an ounce, an increase of about 0.7%.
In the meantime, the spot contracts for gold rose in US dollars within the limits of $ 10, reaching levels near $ 1940 an ounce, an increase of 0.5% during these moments of today’s trading.
The main fell during today’s trading against a basket of major currencies, coinciding with the European Central Bank’s assertion of the continuation of the tightening policy, and on the other hand, expectations about relative calm on the part of the US Federal Reserve weaken its strength as well.
During these moments of today’s trading, the main dollar index decreased by 0.35%, down to levels near 101.8 points, approaching its lowest level in 9 months.
The return decreased during these moments of today’s trading in the range of 0.014 points, to levels of 3.5%.
Gold prices rose marginally, at the end of trading yesterday, Monday, to record the highest level since April 2022, amid limited transactions in conjunction with the Lunar New Year holiday in East Asia.
This comes with the dollar’s weakness and prospects for a slowdown in interest rate hikes by the US Federal Reserve, which has supported the yellow metal.
The price increased by 0.02%, or $0.40, to reach $1928.60 an ounce, and gold prices ended Friday’s trading higher for the second consecutive session.
ACI Securities chief economist Clifford Bennett said that gold continues to trend higher and the current narrative of the Fed having to cut or stop interest rate hikes in the next few months provides support.
This comes as markets expect the US central bank to slow the pace of interest rate increases in the period from January 31 to February 1, during the policy meeting, to 25 basis points.--
On the other hand, gold’s gains are limited by the statements of some Federal Reserve officials who indicated that their battle against inflation is not over yet.-
So far, the Fed raised interest rates by 50 basis points, last month, after delivering 4 consecutive increases of 75 basis points.
Where is gold headed?
ACI Securities’ chief economist said gold prices could trade around current levels in the short term, but would accelerate above $2,000 this year.
This comes in conjunction with expectations that the European Central Bank will be more aggressive than previously thought in its tightening campaign, adding another 50 basis points to the deposit rate on February 2; It continues to fight rampant inflation.
On the other hand, the actual demand for gold declined in China, last week, in the period leading up to the Lunar New Year holidays, while some consumers in Japan and Singapore sold their bullion to take advantage of the high local prices.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.51% to 917.05 tons last Friday.
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