Gold price rise in early trade

20 Jul 2023 , 11:09 AM

On Thursday, gold prices gradually increased and were trading close to an eight-week high on speculation that the U.S. Federal Reserve would soon pause its cycle of interest rate increases.

Spot gold increased 0.1% to $1,978.59 per ounce. Gold futures in the US were essentially unchanged at $1,981.30.

The dollar index fluctuated close to a more than year low, lowering the price of gold for owners of other currencies.

According to CME’s Fedwatch tool, the Fed is anticipated to raise rates by 25 basis points (bps) during their meeting next week, keeping them in the 5.25%–5.5% range until reductions are anticipated starting in 2024.

The opportunity cost of storing non-yielding bullion is reduced when interest rates are lower.

Next week, the European Central Bank is also anticipated to increase rates by 25 basis points.

Later in the day, investors will be watching for initial jobless claims data for the U.S. for the week of July 15, which are expected to increase from a seasonally adjusted 237,000 to 242,000.

The largest gold-backed exchange-traded fund in the world, SPDR Gold Trust, said that its holdings increased for the first time in over three weeks on Wednesday, up roughly 0.2% to 913.80 tonnes from 912.07 tonnes on Tuesday.

A Reuters survey revealed that China is planning to maintain its lending standards despite growing expectations for additional assistance due to the country’s rapidly deteriorating economy.

Spot silver was stable at around $25.16 per ounce, platinum was down to $972.48, while palladium fell to $1,303.39, falling by 0.3%.

For feedback and suggestions, write to us at [e-mail]