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What is the main reason behind the sharp rise in gold prices today? by the Arab merchant

© Reuters. What is the main reason behind the sharp rise in gold prices today?

Arabictrader.com – registered prices A significant increase during today’s trading Thursday in the context of the decline in the United States, as well as the release of some economic data supporting the increase in gold.

Spot gold contracts were up about 1.98% to hit $1801 an ounce to continue gains from morning trading, and gold futures were up about 2.80% to reach 1809 dollars an ounce.

The reasons behind the sharp rise in gold prices

The US dollar index fell 1.03% to 104.87 points, which improved gold’s ability to make huge profits in today’s trading.

Often, a decline in the US dollar index reduces the cost of dollar-denominated gold for investors holding other currencies, which ultimately increases the demand for gold.

The dollar’s decline came in response to growing market expectations that the US Federal Reserve will avoid raising interest rates by 75 basis points, which the bank has pursued over the past four meetings, in favor of a slower pace of just 50 basis points.

Also, US economic data released earlier in the day did not support the US dollar, as the US personal consumption spending index, which is the Federal Reserve’s preferred measure of inflation, rose 5% on year-on-year basis last October, while May The previous reading of the index showed growth of about 5.2 percent last September, according to data revealed by the Commerce Ministry on Thursday.

Furthermore, the US dollar is still in a state of decline following US Federal Reserve Governor Jerome Powell’s speech on Wednesday when he said the Fed could discuss slowing the pace of interest rate hikes at its next meeting, and Powell made it clear that the global economy will witness a new situation, the main pillar of which is the decline in the rate of inflation while keeping interest rates high, as well as the employment sector in the United States.

This rhetoric has led to a massive rally past two-week highs, as well as causing the US dollar to tumble further.

Additionally, US Treasury yields fell, with the 10-year yield down 3.08%, meaning gold looked more attractive to investors than the 10-year US Treasury.

As for the prices of other metals other than gold; Contracts grew by 4.54%, or approximately $23 an ounce, while there was an increase of approximately 2.25%, in addition to growth in contracts on metallic platinum, which recorded approximately 1,053 dollars an ounce.

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