Gold price marches above $2,000 to the beat of weaker dollar
Gold prices marched above the $2,000 an ounce mark on Tuesday, buoyed by investors’ expectations that the Federal Reserve has concluded its interest rate hikes, pressuring the US dollar and bond yields.
Spot gold rose 1.2% to $2,001.83 per ounce as of 11:55 a.m. EDT, approaching its highest in a month. US gold futures also gained 1.2%, trading at $2,003.80 per ounce in New York.
Meanwhile, the US dollar fell to more than a two-month low, making gold less expensive for other currency holders. The benchmark 10-year Treasury yields also hovered near two-month lows.
“It looks like it’s short covering because of the weaker US dollar and also the fact that it doesn’t look like there’s going to be any more rate interest rate hikes here coming up on the horizon, so that’s bullish for gold,” Bob Haberkorn, senior market strategist at RJO Futures, told Reuters.
Investors are now waiting on minutes from the Fed’s latest meeting due later in the day, which could give further clarity on the central bank’s interest rate path.
“After the minutes come out this afternoon, if there’s anything about a pause on rate hikes, you could see (gold) steadily above $2,000” Haberkorn added.
“Now that concerns about the conflict in the Middle East have abated noticeably, the US interest rate outlook has regained the upper hand for gold,” Commerzbank said in a note.
(With files from Reuters)