Gold prices rose on Friday, supported by lower US Treasury yields, although prospects of a Federal Reserve interest rate hike and a stronger dollar limited gains.
By 12:15 GMT, the price of an ounce of gold in spot transactions rose 0.5% to $ 1727.09. Prices fell to their lowest level in more than a year at $1,680.25 on Thursday, before closing up 1.3 percent. Gold is up 1.2 percent so far this week. US gold futures rose 0.8 percent to $1,727.
Investors are currently awaiting the Federal Reserve’s monetary policy meeting on July 26-27, when it is expected to raise interest rates by 75 basis points to control rising inflation. The European Central Bank joined its global peers in combating soaring inflation and raising interest rates by more than expected, even as the euro zone economy suffered from the impact of the Russian war on Ukraine.
Higher interest rates increase the opportunity cost of owning the precious metal, which does not generate fixed returns, and boost the dollar, which makes gold expensive for buyers abroad. As for other precious metals, silver settled in spot transactions at $18.78 an ounce, while platinum increased by 1 percent to $880 and palladium rose 0.5 percent to $1,902.18.