Gold Price Hits Highest Level of Trump Presidency
New York (Feb 2) Gold hit an 11-week high on Thursday after the U.S. Fed eral Reserve gave no clear signal on the likelihood of a March interest rate increase in its latest statement, prompting another drop in the dollar.
The U.S. currency slipped to a 12-week low against a basket of currencies and an eight-week low versus the euro after the U.S. central bank gave an upbeat view on the economy, but no hint of accelerating rate hikes. Spot gold struck its highest level since Nov. 17 at $1,225.30 an ounce, and was up 0.9% at $1,219.96.
U.S. gold futures for April delivery were up $14.00 at $1,222.40.
"Gold... successfully traded through its resistance at $1,220," Heraeus trader Alexander Zumpfe said. "If it closes above there, the short-term uptrend is back and a test of $1,235 might be on the cards."
The weakening dollar was the main factor driving gold higher, along with concerns about political risk, Afshin Nabavi, head of trading at MKS, said. U.S. non-farm payroll data for January will be closely watched on Friday. The report is seen as a key barometer of the health of the U.S. economy and will be examined for signs that growth is strong enough to support further interest rate hikes.
Gold is highly sensitive to rising U.S. rates, which increase the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced. Investors' interest in gold rose after the U.S. currency suffered its worst January in 30 years.
The world's largest gold-backed exchange-traded fund, SPDR Gold Shares, reported its biggest one-day inflow in nearly four months on Wednesday, of 10.7 tonnes. That has helped to support gold despite the absence of many Asian buyers because of the Lunar New Year holiday this week.
"The sharp rebound after a pull down below $1,200 and the Asian pricing model, despite the Chinese New Year, seem favorable," said Spencer Campbell, general manager with Kaloti Precious Metals in Singapore. "We see a lot of bullish signals."
Source: FORTUNE
