Gold prices rose by more than a percentage
Gold prices rose nearly $ 20, approaching to three-week high, helped by the weakening of the US dollar against the backdrop of reducing the likelihood that the US Federal Reserve will raise interest rates in the near future.
In recent days, investors have revised their predictions on the timing of the Fed raising interest rates after Friday published a weak report on the US labor market. The recent speech of Fed Yellen also confirmed the central bank's intention to postpone the rate hike as long as the uncertainty about the economic outlook does not shatter. Today futures on interest rates Fed indicate that the probability of a rate hike of 2% in June. Meanwhile, the chances increase rate estimated at 25% in July. Recall, the higher interest rates in the US have a negative impact on the price of gold, since lead to a stronger dollar, which trades precious metals. This makes the purchase of gold more expensive for holders of other currencies. However, the gradual increase in rates carries less of a threat to the gold price than a series of sharp climbs.
"We know that the Fed wants to continue the normalization of monetary policy, but they will not do it if the economy really slows down, - said an analyst at Macquarie Matthew Turner -. Thus, we are again dependent on the following data on non-farm payrolls which, however, will be released only after four weeks. " Turner expects that at its June meeting, the Fed will repeat the recent statements by Yellen, which largely gave an optimistic outlook for the US economy, but did not specify whether the Fed will raise interest rates during the summer months. "Increased nervousness due to proximity of the referendum in the UK can also support the price of gold over the next few weeks - said Turner Macquarie precious metal, which has fallen more than 6 percent in May, rose nearly 2.7 percent since the beginning of the current. month due to lower expectations of Fed rate increase.
Meanwhile, the World Bank's decision to lower the outlook for world economic growth in the 2016 - 2017 year may also force the Fed to postpone the rate hike at a later time. Recall now the World Bank has downgraded its forecast for global GDP growth in 2016 (0.5% to 2.4%) and 2017 (0.3% to 2.8%). "World Bank lowers its forecast for global growth due to sluggish growth in developed economies, lower commodity prices, weaker international trade and movement of capital reduction," - said in the June survey. The outlook on the Chinese economy remained stable in India is projected sustained growth, but has been downgraded forecast for the developed Western economies.
The cost of the August gold futures on the COMEX rose to $ 1261.9 per ounce.