Gold prices rose on Tuesday, August 29, as the recent decline in the dollar and Treasury bond yields showed signs that the economy was exhausted, ahead of the release of crucial data on inflation and jobs this week that could determine the future of interest rates.
By 06:45 GMT, spot gold rose 0.2% to $1923.27 an ounce, hovering near its highest level since August 10, which it reached yesterday, Monday. US gold futures rose 0.2% to $1,951.10.
The decline of the dollar against a basket of major currencies and the decline in US Treasury yields for ten years from their highest level since 2007, which they reached last week, led to a rise in gold prices.
A lower dollar makes gold, which does not yield, less expensive for holders of other currencies.
Kelvin Wong, a senior analyst for Asia and Pacific markets at OANDA, said that the statements of Jerome Powell, the US Federal Reserve Chairman, indicated that the battle of inflation is not over yet, and with the return of the inflationary stagnation scenario again, some demand for gold may have begun to increase as a tool to diversify assets.
Among the slew of US economic data scheduled for release this week, the focus will be on the US Fed’s preferred inflation measure, the Consumer Price Index due on Thursday, and the Nonfarm Payrolls report due on Friday.
As for other precious metals, spot silver rose 0.1% to $24.28 an ounce. Platinum rose 0.1% to $965.49. Palladium fell 0.6% to $1,247.15.