This week the attractiveness of the bullion increased, as markets value the possibility that the Fed’s rate hike cycle has come to an end. The price of gold rose on Friday, marking its best week since mid-March, amid falling US Treasury yields.
Spot gold gained almost 1% to $1,886.40 per ounce. US gold futures rose 0.9% to $1,899.20.
Despite Thursday’s strong US inflation data, markets were increasingly pricing in a scenario in which the Fed cycle peakedsaid ActivTrades senior analyst Ricardo Evangelista.
“Declining yields, a weakening dollar and uncertainty over the conflict in Israel are positive factors for gold,” Evangelista said.
US Treasury yields and dollar fell on Fridayafter they strengthened in the last session and weighed on gold after data showed that US consumer prices rose in September.
Before the release of inflation data in the United States, gold hit two-week highs on Thursdaydriven by the dovish stance of key monetary policy makers, who noted that the recent rise in US Treasury yields could make further rate hikes less necessary.
This, along with the demand for safe haven amid violence between Israel and the Palestinian Islamist group Hamas, headed the non-interest-bearing asset toward an increase of close to 3% this week, the largest since mid-March.
Investors also evaluated the latest inflation data from Chinathe largest consumer of gold, which showed that consumer prices faltered and factory prices contracted slightly faster than expected in September, with both indicators showing persistent deflationary pressures.
Source: Ambito
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