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Gold is near one-week maximum ahead of Fed minutes
On Thursday, gold kept to a one-week maximum because the evergreen buck dived and market participants looked ahead to the meeting minutes from the key US bank.
August delivery gold futures managed to ascend 0.22% being worth $1,256.20 a troy ounce.
The key precious commodity was underpinned by a weaker greenback. Gold usually goes up when the major American currency heads south. It’s due to the fact gold is denominated in the American dollar. Therefore, it reacts to any fluctuations in the value of this currency.
Assessing the greenback’s purchasing power versus a group of six main currencies, the USD index headed south 0.08% coming up with an outcome of 94.11.
Bullion is getting less affordable for holders of other currencies when the evergreen buck is going up and more affordable when it’s slumping.
Market participants are waiting for the minutes from the Fed’s gathering in June. The key US financial institution had its interest rate lifted at its last gathering and also dropped a hint at two more probable rate lifts by the end of 2018. Market participants are going to wait for further details on rate hikes as well as the state of the American economy.
Hopes for higher interest rates tend to spur the evergreen buck by simply making the US currency more attractive to yield-seeking traders.
Meanwhile, trade tensions were still in focus in the face of reports that America could provide a zero duty solution on cars and also from the European bloc. America is also supposed to roll out duties on $34 billion China’s products. China has told it’s going to respond anyway.
In addition to this, silver futures managed to ascend 0.04% on the Comex exchange hitting $16.050 a troy ounce. Platinum futures gained 0.13% being worth $847.40.
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
Joe Biden is going to unveil a Covid-19 relief package of about $2 trillion. After this announcement, the 10-year Treasury yield rose, adding support for the USD.