Gold rose more than 1% as investors bet on stopping the US interest rate hike
On Tuesday, gold prices rose more than 1%, to their highest levels in more than a month, supported by the decline in the dollar and Treasury yields, as investors bet that the latest US economic data provides an argument for ending the Federal Reserve (US Central Bank) raising interest rates, as well all its restrictive policies.
Spot gold prices rose 1.3% to $1979.19 an ounce, by 12:41 GMT, after hitting their highest levels since late May, while US gold futures rose 1.5% to $1985.20.
The dollar index hit its lowest level in more than a year, making gold less expensive for holders of other currencies. US Treasury yields fell for the second day in a row.
Jim Wyckoff, senior market analyst at Kitco, said prices may fall to the $1,900 range if the central bank raises interest rates, although the data reinforces the idea that the central bank will ease monetary tightening by the end of this year, something that would support gold.
Several reports showed that the United States managed to stem the highest inflation in more than forty years, which remained one of the biggest challenges to the American economy during the past two years.
And last week, a report showed that consumer prices in the United States increased by only 3% in June, compared to the same month last year. The Fed targets an average rate of around 2% for what it considers “healthy inflation” in the economy.
The decline in inflation came after the rapid and continuous increases implemented by the Federal Reserve in the US interest rate, which in turn raised the dollar to its highest levels.
Professor of Applied Economics at Johns Hopkins University, Steve Hanke, said that the United States is no longer suffering from an inflation crisis. He added, in comments reported by the American “CNBC” channel, that I think the inflation story is a thing of the past.
As for other precious metals, silver rose in the spot market by 0.9% to $25.07 an ounce, while platinum increased by 0.8% to $983.54, and palladium jumped 2.9% to $1,321.94.
(Reuters, The New Arab)
2023-07-18 19:46:47
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