Gold prices rose about 1% today, Thursday, with increasing demand for the precious metal due to the decline in the dollar and lower bond yields, while investors await US inflation data for indications of the next Federal Reserve (central bank) step.
Spot gold rose 0.9% to $1982.46 an ounce by 1702 GMT, after touching its highest level since March 24 at $1984.19 earlier. US gold futures rose 0.8% to $1,983.10, according to Reuters.
The dollar index fell 0.5%, which makes the precious metal cheaper for buyers holding other currencies, and US Treasury yields for ten years also fell.
said Michael Langford, principal at corporate consultancy AirGuide "In the short term, profit-taking and easing fears of further contagion among banks would lead to a continued decline in the price of gold towards $1920 an ounce.".
Gold rose above $2,000 after the sudden collapse of two US banks this month, but it has given up gains since then as authorities intervened with bailout measures, such as UBS’ takeover of troubled Credit Suisse and First Citizens Bankers’ purchase of collapsed Silicon Valley bank.
However, analysts at ANZ said in a note that the yellow metal "It has withstood relatively well in the face of unfavorable conditions".
Market participants are now awaiting Friday’s US PCE data, which is the Federal Reserve’s preferred inflation measure, in search of more clues on monetary policy.
The opportunity cost of holding non-yielding gold rises when interest rates are raised to curb inflation.
Among other precious metals, silver rose in spot trading 2.3% to $23.89 an ounce. Platinum rose 1.8% to $984.31, and palladium rose 1.7% to $1,464.63.
