Gold prices hit 3-week high supported by interest rate cut bets ‎

Gold prices rose today, Thursday, to their highest level in more than three weeks, with dollar and bond yields reaching their lowest levels in several months, amid increasing bets that the Federal Reserve (the US central bank) will begin reducing interest rates next March.

According to Reuters, gold in spot transactions increased 0.5% to $2,086.69 per ounce by 0406 GMT, which is its highest level since December 4, when prices jumped to a record level of $2,135.40. Prices are heading to record the highest gains in three years, with an increase of 14%

US gold futures rose 0.2 percent to $2,096.50 an ounce.

Kyle Rodda, a financial markets analyst at Capital.com, said that the decline in both returns and the dollar reflects the decline in risks associated with interest rate fluctuations.

Lowering interest rates reduces the opportunity cost of owning bullion that does not generate returns

The dollar index fell to its lowest level in five months, which also increased the attractiveness of gold. The index is heading towards the worst annual performance since 2020

As for other precious metals, silver rose in spot transactions by 0.7 percent to $24.42 per ounce and is heading to end the year with annual gains of approximately 2 percent.

Platinum rose 0.2 percent to its highest level in more than six months at $999.00. Palladium also increased 0.2% to $1,156.16, but is on track to record the largest annual decline since 2008.