The gold price continued to rise today, chalking up its 6th gain in 7 sessions and bringing it to a 3 week high as investors brace for the release of the minutes meeting later today from the US Federal Reserve.
At 2.34pm (GMT) gold was trading at $1.164 up from $1.159 in yesterday’s trading.
Although most expect few surprises from the Fed, any talk of interest rate hike may put pressure on gold.
The precious metal was also helped today by a fall in the US dollar against most major currencies which tends to benefit gold as it usually moves in the opposite direction to the greenback,
“The dollar index has consolidated and the big outflow from exchange traded products which has been the biggest headwind for gold in the past few months, has stopped recently,” Julius Baer analyst Carsten Menke said.
“It is too early to tell if we are going to have a stabilization in the holdings because the fundamental backdrop hasn’t really changed and we are still in this positive post-Trump election environment where we are hoping for better growth in the States, a stronger dollar and higher interest rates,” he added.
With the inauguration of Donald Trump as President of the United States just over 2 weeks away, we may see some volatility in the gold price on the back of some of his remarks and election promises, and if he will in fact, follow through on them.
Gold “will move towards center stage as Trump’s attitude [toward] China affects globalization and creates divisions between east and west,” he said. “The U.S. economy can be strong alongside a strong gold price.” noted Julian Phillips, founder of Gold Forecaster.com