Gold records 6-month high, supported by US dollar decline

Ten-year treasury bond yields hit almost two-month lows at 4.3630 percent
Gold records 6-month high, supported by US dollar decline
The dollar index touched its lowest levels since late August against major rival currencies

Gold prices in global markets recorded a slight increase, after touching their highest level in six months today. Expectations that the Federal Reserve will end its interest rate hike cycle have kept the dollar and treasury bond yields under pressure.

Low yields on bonds and stakes

In this context, Matt Simpson, chief analyst at City Index, explained that the decline in bond yields and stakes will push the Federal Reserve to cut interest rates sooner than originally planned.

The dollar index touched its lowest levels since late August against major rival currencies. This makes gold less expensive for holders of other currencies. Moreover, ten-year treasury bond yields reached almost their lowest levels in two months at 4.3630 percent.

Facilitating monetary policies

Recently released data indicators showed a slowdown in inflation in the United States.  This reinforced expectations that the Federal Reserve may begin easing monetary policies sooner than expected. The market is currently awaiting personal consumption expenditure data which the Federal Reserve uses as a preferred measure of inflation.  This data is scheduled to be released this Thursday. Moreover, low-interest rates reduce the opportunity cost of holding non-yielding cast gold.

Change in prices

Gold rose in spot transactions by 0.1 percent reaching $2,015.33 per ounce by 6:43 GMT. That is after it reached its highest levels since May 16. US gold futures for December also increased by 0.2 percent recording $2,015.70 per ounce.

As for other precious metals, silver settled in spot transactions at $24.62 per ounce. Meanwhile, platinum rose 0.3 percent to $921.49 and palladium fell 0.6 percent to $1,064.15 per ounce.

Earlier last Friday, the global price of gold stabilized in spot transactions at $1,992.46 per ounce. It headed for gains for the second week in a row, supported by the dollar’s weakness. That is as markets grew more confident that the US Federal Reserve had finished raising interest rates.

Read: The dollar records its weakest performance in a year

Gold rise

The yellow metal rose 0.7 percent. There was little change in US gold futures contracts, which recorded $1,993.40.

In this context, Tim Waterer, chief market analyst at KCM Trade, explained that declining returns and a decline in the US dollar were the prevailing topics in the financial markets during the past week. This atmosphere helped raise gold prices.

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