Gold prices rise based on USD decline and increasing investment demand
Last Updated on August 17, 2020
Gold prices rose on Monday to resume its gains that were temporarily halted in previous dealings. This rise comes based on USD decline against a basket of global currencies, in addition to renewed purchase of metal as a safe haven.
Gold prices rose by 0.4% to $ 1,957.01, from today’s opening level of $ 1,949.60, and reached the lowest level at $ 1,929.47.
In terms of last week’s trading, gold prices fell by 4.5%, in the first weekly loss since late May, due to acceleration of corrections and profit taking, after huge gains that pushed prices to trade above $2,000 mark for the first time in history.
Gold prices increasing based USD decline
USD fell against most of major currencies during trading on Monday, amid anticipation events of Federal Reserve meeting.
Next Wednesday, minutes of US Central Bank meeting are expected to be released to find out what was discussed during meeting last month and to find out the hint of monetary policy in light of Corona virus crisis.
A number of members of Federal Reserve had emphasized need for largest economy in the world for more support, whether from US Congress through fiscal stimulus or from monetary policy from central bank.
Discussions between Democratic and Republican parties in Congress are still continuing to reach an agreement regarding second financing package to face the consequences of Coronavirus crisis on US economy.
Markets are relying on promising vaccines to prevent Coronavirus, with China registering its second vaccine to combat the virus, after a vaccine that Russia registered last week.
In terms of trading, dollar index fell (against a basket of major currencies) by 18:41 GMT by 0.2% to 92.8 points, and reached highest level at 93.1 points, while lowest price was recorded at 92.7 points.
Gold holdings of the SPDR Gold Trust, the largest global index fund backed by gold, fell on Friday by 3.8 metric tons, the third decline in the last four days, bringing the total to 1,248.29 metric tons, which is the lowest level since July 29.
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