The dollar index jumped nearly 1%, making greenback bullion less attractive to foreign buyers.
The US central bank on Wednesday cut rate hikes to a quarter of a percentage point after a year of higher rate hikes. He said a tipping point in the fight against high inflation had passed, but “victory” would still require rates to rise further and stay high until at least 2023.
“There are other statements where he (Fed Chairman Jerome Powell) wanted to try to manage market expectations…But the dovish elements were there enough to continue to push gold higher,” he said. Craig Erlam, Senior Market Analyst at OANDA.
In addition, both the Bank of England and the European Central Bank raised interest rates on Thursday by 50bp.
Is it time to buy?
Gold tends to appreciate against lower interest rate expectationssince you are they reduce the opportunity cost of holding bullion, which does not earn interest.
Gold is considered a safe haven asset. Its ability to preserve wealth and its greater security as an investment, compared to the volatility of paper-denominated currenciesearned him that name.
In general terms, one of the best times to invest it is when the asset trades at a cheaper price. As gold is used as a safe haven asset, Yeah there is a fall in the dollar or there is a forecast that a global crisis will break outgold will always be an advisable investment.
Source: Ambito
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