Gold prices climbed on Thursday to a nine-week peak on a weaker dollar and bets that the US Federal Reserve might soon hit pause on its interest rate hiking cycle.
Spot gold was up 0.5 percent at $1,987.18 per ounce, its highest since mid-May. US gold futures were up 0.4 percent to $1,988.80.
“We are bullish gold from here as we are likely to reach the end of Fed rate hikes at the next FOMC (Federal Open Market Committee) meeting (26 July),” said Baden Moore, head of carbon and commodity strategy at National Australia Bank, adding that the market was also focusing on potential rate cuts.
Lower interest rates help bullion as it reduces the opportunity cost of holding non-yielding bullion.
Additionally, the dollar index was 0.2 percent lower, close to an over one-year low, making gold cheaper for holders of other currencies.
The Fed is expected to raise rates by 25 basis points (bps) at its meeting next week, keeping them in the 5.25 percent -5.5 percent range in 2023, according to CME’s Fedwatch tool.
Investors will keep an eye out for initial jobless claims data in the US later in the day for the week of July 15, forecast to rise to 242,000 from a seasonally adjusted 237,000.
“US jobless claims have been rising over the 2Q — the market is expecting a sideways move — I think if we see jobless claims flat to higher I’d expect a positive move on gold,” Moore said.
Data showed holdings of SPDR Gold Trust the world’s largest gold-backed exchange-traded fund, rose 0.19 percent to 913.80 tons on Wednesday. – Reuters
