© Archyde.com. What is the main reason behind the strong rise in gold prices today?
Arabictrader.com – recorded prices A significant increase during trading today, Thursday, in the context of the US decline, as well as the issuance of some economic data supporting the rise of gold.
Spot gold contracts recorded a growth of approximately 1.98% to reach $1801 an ounce, to continue the gains it achieved during morning trading, and gold futures rose by regarding 2.80% to reach $1809 an ounce.
The reasons behind the sharp rise in gold prices
The US dollar index declined by 1.03%, to record 104.87 points, which enhanced gold’s ability to achieve huge profits during today’s trading.
Often, a decline in the US dollar index lowers the cost of dollar-denominated gold to investors holding other currencies, which ultimately increases demand for gold.
The dollar’s decline came as a response to mounting market expectations that the US Federal Reserve will avoid raising interest rates by 75 basis points, which the bank has pursued in the past four meetings, in favor of a slower pace of only 50 basis points.
Moreover, the US economic data released earlier in the day did not support the US dollar, as the US personal consumption expenditure index, which is the Federal Reserve’s preferred measure of inflation, rose by 5% on an annual basis during last October, while it may The previous reading of the index showed a growth of regarding 5.2% last September, according to data revealed by the Ministry of Commerce today, Thursday.
Also, the US dollar is still in a state of decline following the speech of the US Federal Reserve governor yesterday, Wednesday, as Jerome Powell stated that the Fed may discuss slowing the pace of interest rate hikes at its next meeting, and Powell made it clear that the global economy will witness a new situation, the main pillar of which is the decline in the inflation rate while maintaining interest rates. high, as well as the employment sector in the United States.
This rhetoric has resulted in a massive rally beyond its highest levels over the past two weeks, as well as sending the US dollar further crashing.
In addition, US Treasury yields declined, with the 10-year yield declining by 3.08%, which means that gold seemed more attractive to investors compared to the 10-year US Treasury.
As for the prices of other metals other than gold; Contracts recorded a growth of 4.54%, equivalent to approximately $23 an ounce, while it witnessed an increase of regarding 2.25%, in addition to the growth of platinum metal contracts, to record regarding $1,053 an ounce.
