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Gold stable below 3-week peak on stock market rally

Gold stable below 3-week peak on stock market rally

Mubasher: Gold prices steadied on Friday, below their highest level in three weeks reached in the previous session.

The precious metal was pressured a rally in stock markets, but it remained on course for the third consecutive weekly gain, after the Federal Reserve ruled out further interest rate hikes this year, according to Thomson Reuters.

By 9:15 am GMT, US gold futures rose 0.33% to $1,317.90 per ounce, while spot gold went up 0.21% to $1,312.14 per ounce, after hitting 1,320.22 per ounce, its highest level since 28 February.

Gold was still heading for a third weekly gain, having increased around 0.7% so far this week.

“There was lot of profit-taking in gold after yesterday’s big jump and investors went into equity markets,” Singapore-based dealer GoldSilver Central managing director Brian Lan said.

Asian shares climbed to their highest levels since six months and half, after positive US data and optimism in the tech shares boosted Wall Street stocks.

“Technically, gold is getting good support at the $1,300 price level and fundamentally, the Fed not rising rates this year is a strong signal for gold,” Hong Kong-based Wing Fung Precious Metals dealing head Peter Fung said.

Earlier this week, the US Fed brought its three-year monetary tightening policy to an end, dismissing expectations for any future rate hikes.

Supporting the yellow metal was a decline of the US dollar against the sterling pound after the European Union (EU) agreed to postpone the UK’s departure.

“Gold should push higher, especially once the Brexit uncertainty lifts [as it seems to be doing], allowing the dollar to resume its downward drift, especially now that the Fed has sidelined itself on the rate front,” INTL FCStone analyst Edward Meir said in a note.

By 9:15 am GMT, the US dollar index, a gauge for the greenback against a basket of six major rivals, dropped 0.15% to 96.3550.