Gold Soars as Dollar Weakens and Rate Hike Talk Cools
Gold's price surge continues as it tests its weekly high at $4434 after gaining nearly 10% since August 5. The metal has been driven higher by softer US economic data, including a recent non-farm payrolls report and today's Consumer Price Index (CPI) numbers, which were in line with estimates.
The CPI report has cooled talk of interest rate hikes from the Federal Reserve, leading to modest selling of the US dollar. The dollar's weakness has been further exacerbated by US intervention in the yen market to weaken the currency.
While a peaceful resolution to ongoing conflicts would be beneficial for gold, the reality on the ground is that tensions remain high. Saudi Aramco highlighted the potential for oil prices to spike if strategic reserves are drawn down during its Q2 conference call.