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Gold prices reach its highest level in two weeks supported by USD decline
Gold Prices ( XAU/USD)
Gold prices rose in the European market on Tuesday to extend its gains for the third day in a row, recording its highest level in two weeks, with support of USD decline against a basket of global currencies, with continued purchases of the metal as a safe haven for concerns about global inflation.
Gold prices rose 1.3% to $ 1,992.33, the highest since August 19, from today’s opening level of $ 1,967.17, and reached the lowest level at $ 1,965.24.
Yesterday, gold rose 0.1%, its second consecutive daily gain, with most of the metals denominated in US dollar continuing to rise.
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On the level of trading last August, gold prices lost 0.5%, in a first monthly loss in last five months, due to corrections and profit-taking, after prices recorded highest levels ever at $2,074.93 an ounce.
The dollar index fell on Tuesday by more than 0.5%, to deepen its losses for the third day in a row, reaching its lowest level in 29 months at 91.75 points, reflecting continued selling of US currency against a basket of global currencies.
Gold prices continue to rise in light of USD decline
USD sale increased in the recent period, especially after the speech of Federal Reserve Chairman, Jerome Powell, at Jackson Hole Economic Conference, during which he announced a new monetary policy framework for US central bank.
The policy focuses on working to support the recovery of economic growth rates in the country without regard to inflation levels, which has enhanced chances of US interest rates remaining low for a long time, and lower than interest rates in other countries.
Data in Europe on Tuesday showed that pace of inflation in Eurozone contracted in August for the first time since 2016, which renewed fears about stagflation in most global economies, which strengthened purchase of the metal as a safe haven.
Gold holdings of SPDR Gold Trust, largest global index fund backed by gold, remained unchanged yesterday, for the second day in a row, with total continuing at 1,251.50 metric tons.
Professional Trader and Analyst, economist in Financial and Forex market since 2004.holds an MBA from the American University in Egypt. Mohammed works as an economic writer and technical & fundamental analyst for many international Forex and financial trading companies in both English and Arabic on a daily basis.