Thursday, 23 May 2024

Gold prices advance on lower dollar and political tensions


Gold prices rose today, Thursday, due to the decline in the dollar and investors’ search for safe havens amid fears of the expansion of the conflict in the Middle East, which reduced the impact of the possibility of a lower US interest rate cut this year.

By 1001 GMT, gold in instant transactions rose 0.8% to $2,379.33 per ounce, after recording the highest level ever at $2,431.29 last Friday, while US gold futures rose 0.2% to $2,393.70.

According to Reuters, Xiao Fu, an analyst at the Bank of China International, said, “The decline in the dollar has strengthened precious metals in general, and there are also supportive factors that have played a role in this regard, such as geopolitical risks and the diversification of central bank reserves.”

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The dollar fell for the second day after a rare warning from the finance ministers of the United States, Japan and South Korea about a sharp decline in other currencies, and the weakness of the dollar makes gold more attractive to holders of other currencies.

On the geopolitical front, Israel indicated that it would respond to the attacks launched by Iran over the weekend, but did not say how. European Union leaders decided to tighten sanctions against Iran.

Federal Reserve (US central bank) officials are now more cautious in discussing the timing of cutting interest rates, as Chairman Jerome Powell indicated on Tuesday that interest rates may remain high for a longer period.

High interest rates reduce the attractiveness of owning the yellow metal, which does not generate returns.

As for other precious metals, silver rose in spot transactions 0.8% to $28.42 per ounce, platinum rose 0.4 at $941.75, while palladium increased 0.3% to $1,028.80.