Gold News: Gold Prices Boosted by a Weakened Dollar and Fears over the Global Economy

Gold News

The price of gold has continued to rise this week, boosted by a weakened dollar. Indeed, with the latest figures on US employment, investors rushed toward the precious metal. The ounce of gold has reached $1278.22 on Friday, its highest since May 18.

Even though the dollar has recovered at the end of last week, it was not enough to compensate for the heavy losses from the previous week, following the speech of the US Federal Reserve (Fed). It was clearly implying that a further increase in interest rates is extremely unlikely to be in the agenda of its next policy meeting on the 14 and 15 June 2016.
With the poor results on US job creation, associated with a possible weak recovery of the US economy, it seems almost impossible that the Fed will tighten the monetary policy this summer.
If a further increase in interest rates would allow the dollar to be more profitable and therefore more attractive to markets, postponing such measures affects the currency but encourages gold demand. Fed also has expressed his concerns about a possible exit from of United Kingdom from the European Union after the June 23 referendum, warning against “significant economic impact “.

Last Tuesday, the World Bank has sharply reduced its forecast on global growth amid “anemic”activities in rich countries, weakened emerging economies, pushing cautious investors towards less risky assets and thus towards gold. “The global economy is exposed to major risks,” says the institution, pointing especially at the worldwide “geopolitical” threat and financial volatility.

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