The gold price rose to a two week high yesterday as fears of an interest rate hike in the U.S. eased. The dollar immediately fell against a basket of international currencies following the Federal Reserve’s latest statement.
The gold price has now risen for 4 consecutive days after touching a 15 month low in dollar terms on Monday.
In the latest Fed minutes officials expressed concern the dollar’s recent rally could lower inflation. The Fed also fears the economic slowdown in the Euro Zone will impact the U.S economy. The news prompted traders to bet the Fed will not increase interest rates in the short term.
Typically low interest rates and loose monetary policy is bullish for the gold price.
The world’s largest gold backed exchange traded fund, The SPDR Gold Trust, which is often used as a barometer of investor sentiment, confirmed its holdings fell yesterday by 5.38 tonnes to 762.09 tonnes on Wednesday.
Gold is currently trading at £758.75 per ounce, silver £10.92 per ounce, platinum £795.51 per ounce and palladium £497.95 per ounce.