19 C
New York
Wednesday, August 17, 2022

Gold Prices Up Sharply as Dollar Struggles

Gold Prices Up Sharply as Dollar Struggles

Investing.com – Gold prices rose sharply on dollar weakness and investor expectations for uptick in gold demand ahead of the Chinese New Year.

for February delivery on the Comex division of the New York Mercantile Exchange rose by $11.00, or 0.84%, to $1,326.70 a troy ounce.

The dollar struggled to add to gains following its biggest weekly gain in nearly a year, prompting a sharp rise in gold prices ahead of the start of the Chinese New Year which usually ushers in gift buying in the form of gold jewellery, underpinning demand for the precious metal.

Dollar-denominated assets such as gold are sensitive to moves in the dollar – A fall in the dollar makes gold cheaper for holders of foreign currency and thus, increases demand for the precious metal.

The biggest demand for gold is for use in gold jewellery which accounts for roughly 50% of total demand, according to the World Gold Council.

“Based on the local premiums to international gold prices, it appears that demand ahead of the Chinese New Year has been relatively strong,” Capital Economics analyst Simona Gambarini said in an email to clients.

The rebound in gold prices comes in the wake of a second straight week of losses, however, market participants expect upward momentum to be short lived somewhat as strong US consumer inflation data due Wednesday could stoke expectations for a faster pace of Federal Reserve rate increases.

Credit Suisse said Monday it sees the Fed raising interest rates four times in 2018 following the federal budget pact agreed last week.

In other precious metal trade, rose 2.52% to $16.45 a troy ounce, while gained 1.19% to $972.90.

rose 1.57% to $3.08, while fell 0.50% to $2.57.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source: Investing.com

Related Articles


Please enter your comment!
Please enter your name here

Stay Connected

- Advertisement -

Latest Articles

Popular Articles