Gold price jumped on Thursday to a two-week high, continuing its gains for the second day in a row, to extend its current rise above $ 1,300 an ounce, based on the decline of US currency against a basket of currencies, European Union to set a specific timing for ending the era of monetary stimulus in the single economic zone.
Gold prices rose by 0.5% as of 10:40 GMT to trade at $ 1305.15 per ounce from the opening level of $ 1299.18, and recorded the highest level of $ 1305.69 since May 31 and the lowest level of $ 1297.54.
Gold prices rose yesterday by 0.2%, driven by the rise in most of the metal prices denominated in US dollars.
Dollar Index fell by 0.3% on Thursday, extending losses for the second day in a row, reflecting the continued decline of the US currency against a basket of global currencies, which supports the prices of gold and other metals denominated in dollars, making them low cost for holders of other currencies.
Decline of the USD comes despite the Federal Reserve’s hawkish statement after yesterday’s meeting, which raised the expectations of the interest rate hike in 2018 to four times three times in its previous forecast, as a result of the strength of the labor market, the acceleration of strong economic activity in the country, Inflation expectations above the target during this year until 2020.
The Federal Reserve raised interest rates by a quarter percentage point to 2.0%, targeting 2.5% by the end of this year, and confirmed its expectations for a three-year rate hike in 2019.
The decline in the US currency is currently due to two reasons. The first is growing concerns about the escalation of trade tensions between the US and China, and the second continuation of the Euro-Dollar buying ahead of the ECB meeting.
US President Donald Trump is scheduled to meet with his top trade advisers on Thursday to determine whether the implementation of new tariffs on Chinese goods will be activated.
Investors are looking forward to the results of the ECB meeting and the remarks of Mario Draghi, the bank’s governor, which are expected to include timing for ending the euro-zone monetary stimulus era and beginning to normalize monetary policy.
Gold holdings in the SPDR Gold Trust Fund The world’s largest gold-backed index was unchanged yesterday for a third consecutive day at 828.76 metric tons, the lowest since February 16.