Gold up in Asia as USD weakens
Investing.com - Gold continued climbing in Asia on Thursday, as investors backed away from the dollar following dovish testimony by US Federal Reserve Chair Janet Yellen and ongoing political concerns in the US.
Gold futures for August delivery edged up 0.32% to $1,223.04 as of mid-morning.
Gold has been rebounding this week, pushed up by a raft of news that pushed the dollar down and sent investors towards the security of gold, which typically moves in the opposite direction to the greeback. The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was down 0.17% to 95.39 as of mid-morning in Asia.
Yellen's testimony that the Fed will continue to raise rates but without committing to a timeline and saying it was still unclear whether the US would meet inflation targets send the dollar down. Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar.That added to ongoing political concerns associated with President Donald Trump and links to Russia.
The Fed hiked rates at its June meeting and stuck to its forecast for one more rate hike this year, but the subdued inflation outlook has raised doubts over whether officials will be able to stick to their planned tightening path.
Last week, gold prices dropped to almost four-month lows.
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