Mubasher TV
Contact Us Advertising   العربية

Gold rises; dovish Fed stance, US political deadlock drag dollar

Gold rises; dovish Fed stance, US political deadlock drag dollar

Mubasher: Gold prices saw gains on Thursday as mounting expectations that the US Federal Reserve would place brakes on its monetary tightening cycle this year weighed on the dollar.

Moreover, the greenback was dragged by an impasse between US President Donald Trump and Democrats on funding for a border wall.

By 8:25 am GMT, US gold futures rose 0.43% to $1,297.50 per ounce, while spot gold went up 0.20% to $1,296.17 per ounce.

Minutes from the Fed’s policy meeting on 18 and  19 December showed that some policymakers favoured a patient approach to future interest rate hikes.

“Gold is getting a bit of support out of a dovish Fed and institutional instability in the US,” Australia-based IG market analyst Kyle Rodda told Thomson Reuters, noting that markets priced in a possible interest rate cut than a raise in the year ahead.

As a result, Treasury yield was lower, “especially after the Fed minutes, which gave the US dollar a bit of a kick down,” Rodda said.

Lower treasury yields can indicate a lower demand for the greenback, as the US currency is used to purchase bonds.

The US dollar which tracks the dollar against a basket of major currencies, index inched down 0.08% to 95.1460, after the gauge retreated to its lowest level in almost three months.

In addition, President Trump withdrew from talks with Democratic congressional leaders on Wednesday over funding a border wall with Mexico, and re-opening the government, dubbing the meeting as “a total waste of time.”