Gold rises above $930
(Reuters) – Gold rose above $930 per ounce on Wednesday, gathering strength as the dollar prolonged its downward slide against major currencies on expectations that the U.S. Federal Reserve will not rush to raise interest rates.
The metal extended its gains in London after hitting a six-week low of $912.90 on Monday, with the dollar retreating further against major rivals — making bullion and other commodities priced in the U.S. currency more appealing to non-U.S. investors.
Spot gold rose to $929.60 an ounce by 1019 GMT (6:19 a.m. EDT), up almost half a percent from $925.15 quoted late in New York on Tuesday. It earlier hit a high of $930.35.
The Fed is expected to emphasize that the U.S. economy remains in a vulnerable position, despite some reassuring signs, when it publishes its post-meeting statement later on Wednesday.
Analysts said that short-covering would probably boost bullion, while gathering uncertainty about the pace of global economic recovery was also supportive to its role as a hedge against such jitters.
“The weaker dollar is helping today,…and people are becoming more nervous about the state of the financial landscape,” said Robin Bhar, an analyst at Calyon.
“There was a feeling that the Fed would have to tighten (rates) a lot sooner, but investors are perhaps reassessing their view of the timing of rate increases. And that, of course, would help gold,” he added.
Categorised as: Gold News