Gold Surges to 14-Week High on Weaker Dollar and Easier Monetary Policy Expectations
Gold prices rose to a 14-week high on August 24, supported by weakness in the US dollar and expectations that the Federal Reserve could keep interest rates steady. Spot gold was up 0.4% or $16 at $4,618.05 an ounce, its highest level since May 15.
The weaker US dollar makes gold cheaper for holders of other currencies, potentially boosting demand. A softer dollar can also reflect expectations of easier monetary policy, which tends to support non-yielding assets such as gold.
Market expectations around the Federal Reserve's next policy move are supporting bullion prices, with a 59% probability that the Fed will keep interest rates unchanged in September. Steady or lower interest rates generally benefit gold by reducing the opportunity cost of holding the non-yielding asset.