Gold prices see modest increase over weaker US dollar

(MENAFN) Gold prices saw a modest increase on Thursday, bolstered by a weaker U.S. dollar and growing expectations for a potential interest rate cut by the Federal Reserve. As attention turned towards the upcoming release of key U.S. inflation data, investors were drawn to gold as a safe-haven asset. By 0250 GMT, spot gold had risen by 0.5 percent, reaching USD2,513.77 per ounce, reflecting the metal's continued strength in the face of economic uncertainties.

This recent uptick in gold prices follows a significant rally that saw the yellow metal reach an all-time high of USD2,531.60 per ounce on August 20. So far this year, gold has gained an impressive 22 percent, underlining its appeal amid concerns about economic stability and inflationary pressures. The strong performance of gold highlights the market's response to global financial conditions, particularly in times of heightened uncertainty.

In parallel, U.S. gold futures also experienced a rise, increasing by 0.4 percent to USD2,546.80 per ounce. The futures market, often seen as a barometer of investor sentiment, mirrored the optimism in the spot market, driven by similar factors such as the weaker dollar and speculation around the Federal Reserve's monetary policy. The steady climb in gold futures further underscores the growing confidence in gold as a key investment option.

Contributing to gold's allure was the decline in the U.S. dollar, which fell by 0.1 percent. This depreciation made gold more attractive to investors holding other currencies, as a weaker dollar typically lowers the cost of dollar-denominated commodities like gold. Additionally, U.S. Treasury yields also saw a decrease, which often leads to increased interest in non-yielding assets like gold, as investors seek stability and value preservation in the face of potential market volatility.

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