Gold Hits One-Week High As Dollar Drops After Powell’s Testimony

On Thursday, the prices of gold scaled a more than the one-week peak. This is due to the reason dollar slipped after dovish remarks from the Jerome Powell, U.S. Federal Reserve Chairman later this month boosted the case for an interest rate cut.

Spot gold was up 0.3% at $1,422.43 for each ounce as of 0548 GMT, following past hitting its highest at $1,426 since July. 

The United States futures increased from 0.8% to $1,424.

Managing partner at Vanguard Markets, Stephen Innes said, ‘Last night’s move from the Fed is fairly persuasive that they are going towards more of a risk management overview strategy which is dovish and dollar trading also lower is massive support for gold’.

Powell pointed, in his testimony to Congress to ‘broad’ worldwide weakness that was clouding the economic outlook of the U.S. among uncertainty about the fallout from the administration of Trump trade disagreement with China and other countries.

An economist at OCBC Bank, Howie Lee said, ‘this month testimony of Powell made certain that there is a rate cut on the cards. He has provided a loser financial policy base for gold rates gain more’. 

The lower interest rates reduce the chance price of holding nonyielding bullion and weigh on the dollar making gold cheaper for those investors who hold other currencies.

On Wednesday, indicative of sentiment, holdings of SPDR Gold Trust, the largest gold-backed exchange-traded fund of the world increased 0.8 percent. Whereas, silver increased 0.1 percent to $15.26 for each ounce and platinum gained 0.1 percent to $825.65. After hitting it’s highest since March 22 at $1,599.01 the Palladium go up 0.6% to $1,597.91 an ounce. 

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