Today, the price of gold exceeded $5,200 (almost CZK 105,000) per troy ounce (oz; 31.1 grams) for the first time. The yellow metal is being helped by a weak dollar and geopolitical uncertainty. Investors are also preferring it to government bonds ahead of today’s expected decision by the US Federal Reserve (Fed) on interest rates.
Price growth and dollar development
Gold gained more than three percent on Tuesday. At the same time, the dollar is hovering near a four-year low.
Gold has gained more than 20 percent since the beginning of the year. According to analysts, its growth was also helped by Tuesday’s statements by US President Donald Trump, which indicated that the government wants the dollar to weaken.
Trump’s statements and market reaction
“No, I think it’s great, the value of the dollar… the dollar is doing great,” Trump replied on Tuesday to a reporter’s question about whether he thought the currency had fallen too much.
The decline in the dollar index, which measures its strength against a basket of six major currencies, accelerated after Trump’s comments and reached a daily low of 95.566, the lowest level since February 2022.
At around 7:40 a.m. CET, the price of gold was already close to $5,300 per ounce. On the spot market, where precious metals are bought and sold for immediate delivery, gold was selling for around $5,250 per ounce.
“(The rise in the price of gold) is caused by a very strong indirect correlation with the dollar, and yesterday’s (Tuesday’s) rise in the price of gold during the US session was caused by Trump’s response to an informal question about the dollar, which suggested that there is broad consensus in the White House that the dollar should weaken in the future,” said analyst Kelvin Wong of OANDA.
Source: ÄŒTK
