Gold is ending a positive week for the precious metal by edging ever closer to $1,800 an ounce as it continues to benefit from a weaker US dollar.
This week has been quieter on a macroeconomic front with the Federal Reserve in a news blackout period ahead of its policy meeting next week and this has enabled traders and investors to take stock of where true value lies for the differing assets. This consolidatory period has seen gold continue to make gains, highlighting the positive change of fortunes the precious metal has enjoyed since early November.
A weakening of the US dollar from the record levels seen earlier in the year, the collapse of FTX deterring investors from cryptocurrencies as well as the prospect of the Fed being less aggressive with future rate hikes have all boosted gold and resulted in the price now challenging its highest level for five months.
How long this positive sentiment towards gold lasts will be highly dependent on the outcome of next week’s Fed meeting both in terms of how much the US central bank increases its benchmark rate by and also the rhetoric of Fed Chair Jerome Powell in the press conference following it. If the tone remains dovish then gold can continue to gain but a commitment to the bank’s hawkish stance could send the price tumbling again.
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