Gold price soars to 6-year high; Rate hike decisions dampened

London (July 29)  Gold surged to six year high on Friday after weaker than expected US inflation dampened expectations that the US Federal Reserve will aggressively raise the interest rates.

Data on US second quarter gross domestic product (GDP) and labour costs also pushed the dollar lower, making bullion cheaper for holders of other currencies.

Gold is sensitive to rising rates because they push up bond yields, making non-yielding gold less attractive, and tend to boost the dollar.

Spot gold was up 0.78% at USD 1,268.31 an ounce by 2:20 pm NYT after touching USD 1,270.38, the highest since June 14.

US gold futures for August delivery settled up 0.7% at USD 1,268.40.

Silver was up 1% at USD16.69 an ounce, on track for a third weekly gain.

Platinum was 1.2% higher at USD 933.60 an ounce. Palladium was up 0.7% at USD 878.72, and was on track for its strongest weekly performance in seven weeks.

Source: HFL