BENGALURU. — Gold prices yesterday climbed to a one-week high on the back of a weaker dollar, after US President Donald Trump said he was “not thrilled” with the Federal Reserve for raising interest rates.
Spot gold rose 0,4 percent to $1 194,81 an ounce at 0701 GMT, after touching $1 196,27 earlier, the highest level since August 14. US gold futures climbed 0,5 percent to $1 200,60 an ounce.
The dollar sagged against major peers and the yen yesterday after Trump, in an interview with Reuters, criticised Fed Chair Jerome Powell — his own appointee — for raising interest rates.
“Ultimately (the dollar) is giving much needed strength to gold prices,” said Vandana Bharti, assistant vice president of commodity research at SMC Comtrade Ltd.
“The dollar index may see further correction up to the level of 95,2 which may assist gold to move upward.”
The dollar index was last down 0,30 percent at 95,608. Gold is highly sensitive to rising US rates as it increases the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.
The US central bank has raised rates twice this year and targets two more hikes, with the next one slated in September. However, Atlanta Fed President Raphael Bostic said on Monday he was maintaining his expectation for one more interest rate hike this year.