Gold Rises on Feeble Dollar, Investors Look Forward to Federal Meeting
On Monday, Gold experienced a rise in prices leveraged by a frailer dollar and expectations that the U.S. Federal Reserve will consider adopting a dovish stance at its two-day monetary policy meeting later this week.
Spot gold rose by 0.4% at $1,949.92 per ounce by 0309 GMT, piling on to the previous week’s 0.2% gain. U.S. gold futures went up by 0.6% to $1,958.60.
“The gold market is leaning towards the Fed’s (policy),” expressed Stephen Innes, chief market strategist at AxiCorp. Innes also added that the U.S. central bank might not transform the present narrative. However, there was a strong belief in the market that it would be able to instigate and trigger inflation.
The fallen interest rate environment and long-term expectations that the Fed is going to boost up quantitative easing and weaken the dollar are supporting gold prices, he added.
On Wednesday, the dollar index eased by 0.1% against its rivals, with a focus on the Fed’s policy announcement. A weaker dollar makes the acquisition gold less expensive for holders of other currencies.
Market participants are also looking for the Bank of Japan and the Bank of England’s policy decisions, due on Thursday.
Numbers Silver, Platinum, and Palladium
Major central banks have rolled out unrivaled stimulus measures and kept interest rates low, driving gold to new highs because of its role as a hedge against inflation and currency debasement.
Meanwhile, the European Central Bank’s president, Christine Lagarde, stated eurozone governments must be persistent in spending heavily to help the bloc’s recovery from its historic pandemic-induced recession, complementing already super-easy monetary policy.
“Gold’s bullish longer-term fundamentals have not changed,” Jeffrey Halley, a senior market analyst at OANDA, stated in a note. “Gold has well-denoted support between $1,900 and $1,920 an ounce, with trendline resistance at $1,970.”
Limiting gold’s advance, the appetite of investors for riskier assets increased as hopes for a potential COVID-19 vaccine rose again after AstraZeneca resumed its phase-3 trial.
Elsewhere, silver accumulated 0.4% to $26.84 per ounce, platinum rose by 1.6% to $939.58 and palladium rose 0.2% to $2,325.