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Gold edges up on weaker dollar, Middle East tensions


Spot gold was 0.1% higher at $2,026.7 per ounce after reaching its highest since February 9 on Wednesday

Gold prices inched up on Thursday, buoyed by a softer dollar and escalating tensions in the Middle East, while investors await more U.S. economic data that could shed light on the Fed’s interest rate outlook.

Spot gold was 0.1% higher at $2,026.7 per ounce, as of 0328 GMT, after reaching its highest since February 9 on Wednesday. U.S. gold futures edged up 0.1% to $2,036.9 per ounce.

The dollar index extended losses for the fourth consecutive day, turning the greenback-priced bullion more appealing to overseas buyers.

The short-term outlook for gold is mixed, with delays to the rate-cutting timeline being somewhat countered by safe-haven demand from the geopolitical picture, said Tim Waterer, chief market analyst at KCM Trade.

We have a number of manufacturing and services data due today and any indications of economic weakness could spark hope that interest rate reductions could be on the way, which may assist gold, he added.

Initial jobless claims data is due at 1330 GMT, while flash U.S. manufacturing and flash U.S. services data is scheduled for 1445 GMT.

Minutes of the Fed’s latest policy meeting released on Wednesday showed that majority of policymakers were concerned about the risks of trimming rates too soon.

January inflation data, with consumer and wholesale prices increasing faster than expected, complicate upcoming U.S. central bank interest rate decisions, Richmond Fed president Thomas Barkin said.

Markets are currently pricing in a 72% probability of a cut in June, as per the CME Fed Watch Tool. Lower interest rates boost the appeal of holding non-yielding bullion.

Meanwhile, spot platinum was 0.3% higher at $885.30 per ounce, palladium added 0.6% to $955.63 and silver advanced 0.1% to $22.89 per ounce.

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