Gold Shines Bright: Weekly Rise Driven by Currency Woes and Safe Haven Appeal

23 Feb 2024 , 10:20 AM

Due to safe-haven purchases and a weaker dollar, gold prices saw their first weekly increase in two weeks on Friday. Investors were waiting for more information regarding the expected timing of the U.S. Federal Reserve’s interest rate reduction.

Spot gold was up 0.1% at $2,026.5 an ounce, and it had gained 0.7% this week. American gold futures increased by 0.2% to $2,035.5 an ounce.

Unrest in the Middle East has increased bullion’s appeal as a safe haven. The Houthis of Yemen, who are associated with Iran, have taken credit for an attack on a cargo ship owned by the United Kingdom. They have also used ballistic missiles and drones to threaten Eilat, an Israeli port and tourist city.

The dangers to the economy have become ‘two-sided,’ but it’s not yet time to lower interest rates, according to U.S. Federal Reserve Governor Lisa Cook, as inflation has decreased and the labour market has normalised.

There is ‘no haste’ to decrease interest rates, according to another Fed official, as they assess whether the recent spike in inflation is a harbinger of impending price stability or merely a temporary setback.

A majority of the Fed’s policymakers are worried about the risks of lowering interest rates too quickly, according to minutes of the central bank’s most recent meeting that were made public on Wednesday.

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