Gold shines as bets increase on US interest rate cuts

Gold prices rose today, Thursday, after a sharp rise in the last session, with the dollar and Treasury bond yields declining in the wake of US consumer price inflation data that raised the possibility of an interest rate cut in September.

According to Reuters, by 05:53 GMT, gold rose in instant transactions by 0.2% to $2,391.78 per ounce, after recording its highest levels in more than three weeks, yesterday, Wednesday. US gold futures also increased 0.1% to $2,396.10.

The dollar fell against a basket of other major currencies, making the yellow metal priced in the US currency less expensive for holders of other currencies. Yields on 10-year Treasury bonds also touched their lowest levels in more than a month.

Tim Waterer, chief market analyst at KCM Trade, said: “With inflation resuming its downward path, gold actually flourished in early transactions, and it appears to be heading towards the $2,400 level.”

“However, the potential rise in the dollar or Treasury bond yields may be the biggest obstacle to the gold price in the rest of the week,” he added.