Gold prices firmed on Friday as the dollar continued to weaken, helping put bullion on course for a second consecutive weekly rise as bets on a more aggressive Reserve monetary policy fedral cool.
The price of gold rose on Friday as the dollar continued to weaken, helping the yellow metal post a second straight weekly gain, as bets on more aggressive monetary policy from the US Federal Reserve escalated. cooled down. Spot gold was up 0.4% at $1,857.79 an ounce, as of 0802 GMT. US gold futures also rose 0.4% to $1,855.50. For the week so far, bullion is up about 0.7%. Gold was supported this week by some moderation in market expectations for the Fed’s monetary policy for next year, and especially by weakness in the US dollar, said Ilya Spivak, currency strategist at DailyFX. There is price support at $1,830 on the downside and on the upside, the next key level is around $1,885, Spivak added. Minutes of the Fed’s May 3-4 policy meeting released on Wednesday highlighted, as the market expected, that most participants favored further rate hikes of 50 basis points during the June and July meetings. Rising US short-term interest rates and bond yields increase the opportunity cost of holding bullion, which does not pay. The Dollar Index is poised for a second straight weekly decline, making bullion cheaper for buyers holding other currencies. “We need a clearer signal that the hard economic data is turning sour for the Fed to consider even a pause (in tightening)…which is why gold investors are still reluctant to push the envelope much higher,” said Stephen Innes, managing partner at SPI Asset Management. “If the Fed signals a break, then gold will move much higher, but until it does, we could be in a trading range for a bit.” Spot silver climbed 0.9% to $22.19 an ounce, and has gained about 2% so far this week. Platinum rose 0.2% to $951.63. Palladium gained 0.7% to $2,028.00, and was poised for a weekly gain of around 3.5%, the largest since early April. (Reporting by Bharat Govind Gautam Bengaluru; Editing by Uttaresh.V and Sherry Jacob-Phillips)