Weaker Dollar Boosts Gold Prices as Fed Rate Outlook Shifts
Gold prices continued their upward trend on Friday and are poised for a third consecutive weekly gain. The precious metal is benefiting from a weaker US dollar, which has been impacted by the US Treasury's bond buyback strategy.
The dollar's decline makes dollar-priced bullion cheaper for overseas buyers, further supporting gold's price increase. According to Brian Lan, managing director of GoldSilver Central, 'We've seen the dollar weakening and that has supported not just gold but all precious metals, along with a big change in yields.'
Spot gold rose 0.4% to $4,537.41 an ounce by 0504 GMT, while US gold futures gained 0.5% to $4,593.90. This week's gains have pushed spot gold up 3.6%, with the metal on track for its third consecutive weekly gain.
The market is pricing in a 63% chance of the Federal Reserve holding interest rates steady next month and a 37% chance of a hike. However, higher interest rates typically reduce the appeal of non-yielding bullion like gold.