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Gold Rises on Slipping Dollar by www.expertcommodity.com
Gold prices rose on Thursday morning in Asia as the U.S. dollar weakened on investors’ expectations of a slowdown in interest rate hikes.
The chairman of the U.S. Federal Reserve, Jerome Powell, said Wednesday that rates are “just below” the neutral level now.
Gold Futures for February delivery climbed 0.2% to $1,229.8 per troy ounce, regaining some ground after closing at a two-week low on Wednesday.
Silver Futures for March delivery also rose 0.07% to $14.425, while platinum futuresfor January delivery edged up 0.27% to $829.4.
“Interest rates are still low by historical standards, and they remain just below the broad range of estimates of the level that would be neutral for the economy – that is, neither speeding up nor slowing down growth,” said Powell on Wednesday.
Powell’s comments helped drive the US dollar down. The U.S. dollar index, which tracks the greenback against a basket of six major currencies, fell 0.01% to 96.68.
“The USD will be knocked off its upward trajectory due to a flat yield curve, low rates relative to other G10 countries on a hedged basis, and as the Fed is likely to be less aggressive at a time when other central banks begin to really normalize their policies,” Bart Melek, head of commodity strategy at TD Securities.
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