Gold Futures Price Rises Above $1,940 Supported by Dollar Weakness

Gold futures price stood above $1,940, supported by dollar weakness, which has increased the attractiveness of gold. This is because the weaker dollar makes gold contracts cheaper for holders of other currencies. At 7:24 p.m. Thai time, the COMEX gold contract for delivery in August rose by $12.40 or 0.64% to $1,942.00 per ounce.

Speculative orders also supported the price of gold after it experienced a significant decline of more than 2% last week. This marked the biggest weekly decline since February and was attributed to several central banks raising interest rates.

The Bank of England (BoE) voted to raise interest rates by 0.50% to 5.00% at its last week’s meeting, surpassing market expectations of a 0.25% increase. Additionally, the Norwegian Central Bank, Switzerland, and Turkey have also raised interest rates.

Federal Reserve (Fed) President, Mr. Jerome Powell, reiterated in his address to Congress last week that the Fed will continue to raise interest rates to curb inflation. He signaled that the Fed plans to raise interest rates twice more, bringing them to 5.50-5.75% by the end of the year. However, Powell clarified that the Fed’s decision to hold interest rates steady at the recent monetary policy meeting was a temporary suspension of rate-raising operations, rather than an indication of the end of the rate-raising cycle.

Overall, the weakness of the dollar and the anticipation of further interest rate hikes by central banks have supported the price of gold futures, making it an attractive investment option for many.

What factors have made gold contracts more appealing to investors, particularly those holding other currencies

Gold continues to shine as its futures price remains above $1,940, thanks to a weak dollar. This has made gold contracts more appealing to investors, especially those holding other currencies. At 7:24 p.m. Thai time, the August delivery COMEX gold contract surged by $12.40 or 0.64%, reaching $1,942.00 per ounce.

Following a significant decline of over 2% last week, gold’s price was buoyed by speculative orders. This marked the largest weekly drop since February and was attributed to several central banks increasing their interest rates.

The Bank of England (BoE) surprised the market by voting for a 0.50% interest rate hike to 5.00% during its recent meeting, surpassing expectations of a 0.25% increase. Additionally, the central banks of Norway, Switzerland, and Turkey have also raised their interest rates.

Federal Reserve (Fed) President Jerome Powell reiterated to Congress that the Fed will continue to raise interest rates to control inflation. He indicated that the Fed plans to raise rates twice more, reaching 5.50-5.75% by year-end. Powell clarified that the recent decision to keep rates steady was merely a temporary pause in the rate-raising cycle, rather than an end to it.

In summary, the weak dollar and the anticipation of further interest rate hikes by central banks have provided strong support for gold futures prices, making it an appealing investment option for many.