Gold Price Edges Up On Dollar Weakness

London (July 25)  Gold prices edged higher on Wednesday as the dollar slipped ahead of a key meeting between US President Donald Trump and European Commission President Jean-Claude Juncker on trade. Spot gold was up half a % at USD1,230 an ounce while US gold futures gained 0.4% to USD1,230.30.

The International Monetary Fund, in its annual External Sector Report, said on Tuesday that the US dollar was over-valued because current account surpluses and deficits were becoming increasingly concentrated in advanced economies.

A sliding US currency makes dollar-denominated gold cheaper for holders of other currencies. At the same time, rising bond yields and expectations of higher interest rates lift the opportunity cost of gold, as it pays no interest. With inflation poised to breach its 2% inflation target, the Federal Reserve is expected to raise interest rates gradually despite criticism from US President Donald Trump.

AllianceNews