Gold Rallies to Seven-Week High on Weaker Oil Prices
Gold prices surged to a seven-week high on Thursday and continued to rise on Friday, reaching $4,285.89 per ounce. This marks a 1.1% increase for the day and a 6% gain for the week.
The rally is attributed to weaker oil prices, which have led to lower energy costs and reduced inflation concerns. As a result, investors are less likely to expect higher interest rates, making gold an attractive option as an inflation hedge.
Analysts at StoneX believe that hopes of peace in the Middle East have pushed down inflation expectations, allowing gold to break above its multi-week consolidation level of $4,000.
Matt Simpson, a senior analyst at StoneX, notes that regardless of the upcoming US nonfarm payrolls report, $4,000 has proven to be a solid support level for gold. He expects bulls to take advantage of any dips to drive prices higher towards $4,600.