A slightly weaker dollar helped gold prices reach a one-week high on Thursday as traders took in Jerome Powell’s somewhat balanced remarks following the widely anticipated interest rate hike.
As of 03:52 GMT, spot gold was up 0.3% at $1,977.13 per ounce after earlier reaching its highest level since July 20. U.S. gold futures were up 0.4% at $1,978.70.
According to Brian Lan of Singapore dealer GoldSilver Central, gold prices may fluctuate due to the Fed hinting at another rate hike for the year, with bullion likely experiencing a minor movement up. Brian Lan added that it all relies on forthcoming data.
On Wednesday, the Fed increased interest rates by a quarter of a percentage point, underlining the possibility of a further 25 basis-point increase in September depending on a variety of factors. Powell noted that they were no longer calling for a U.S. recession, nevertheless.
Because storing non-yielding bullion increases the opportunity cost, gold is quite sensitive to rising interest rates.
The dollar index fell, which helped bullion because a declining dollar makes gold more affordable for owners of other currencies. [USD/]
The United States is anticipated to announce later in the day that its gross domestic product expanded at a rate of 1.8% annualised in the second quarter, down from 2% in Q1.
Later in the day, investors will also pay attention to the European Central Bank’s policy decision, as the bank is anticipated to hike rates for a ninth time before switching to a “data-dependent” strategy.
Traders will watch to see if the Japanese central bank moves to phase out its yield control policy on Friday.
As decreasing demand took a toll on corporate profit margins, industrial profits in China fell 16.8% year to far, supporting the need for more accommodating policies to assist the economy.
Spot silver increased by 0.5 percent to $25.04 per ounce, platinum increased by 0.7 percent to $967.97, and palladium increased by 0.4% to $1,264.64.