Gold heads for second weekly gain with lower dollar and bets ‎to stop raising interest rates

Gold prices rose today, Friday, and are heading to record gains for the second week in a row, as the dollar fell and economic data led to bets that the Federal Reserve (the US central bank) is approaching the end of the cycle of raising interest rates.

By 0355 GMT, spot gold rose 0.2 percent to $ 2044.09 an ounce, hovering near the highest level in a year, which it reached on Thursday.

According to “Reuters”, US gold futures contracts increased 0.2 percent, to $ 2,059.40.

The dollar index fell to its lowest level in a year, making the yellow metal cheaper for buyers of other currencies.

“The desire to sell the US dollar in the wake of data on weaker inflation, lower yields and calls for a cut in the final interest rate was a big driver for gold,” said Matt Simpson, senior market analyst at City Index.

Data this week showed that the producer price index in the United States fell in March by the most since April 2020, while the consumer price index rose less than expected.

Moreover, the number of Americans who filed new applications for unemployment benefits last week increased more than expected.

These readings, along with fears of a moderate recession, helped the gold price rise 1.8 percent since the beginning of the week.

“All eyes will be on US retail sales, consumer sentiment and inflation expectations today,” Simpson said, adding that gold could head towards an all-time high if the data is weak enough.

Gold is considered a hedge against inflation and economic uncertainty, but high interest rates reduce the attractiveness of the yellow metal, which does not yield a return.

For other precious metals, spot silver rose 1 percent to $26.04 an ounce, marking a year’s peak. And platinum increased 0.8 percent, to $ 1,055.14.

Both metals are heading to record their fifth consecutive weekly gain. Palladium rose 0.6 percent to $ 1,508.57.