Gold prices stood at USD 1,960 an ounce by the end of last week’s trading due to diverging expectations about the decisions of the US Federal Reserve (US Central Bank) as to whether it will raise or keep interest on the US currency.
Most investors and analysts in the gold markets are awaiting the next meeting of the Federal Reserve, which will be held the day after tomorrow, Tuesday, in which it will decide its future directions regarding monetary policy, as this will directly affect the gold prices to go up or down, the Kuwaiti-based company Dar Al-Sabaek said in a report Sunday.
This upcoming meeting coincides with similar meetings of the European Central Bank and the Bank of Japan, as they are scheduled to take similar decisions about interest rates and any cessation of raising interest rates will be immediately followed by a rise in gold price and vice versa, it added.
Head of Dar Al-Sabaek’s strategic planning Adel Al-Fadhli said, according to the report, that investors were cautious in trading last week after the issuance of the International Monetary Fund report, in which it urged major central banks to continue their monetary policy and monitor inflation closely.
The Bank of Canada unexpectedly raised interest rates last week by 25 basis points to reach 4.75 percent, which is the highest level of Canadian interest since 2001, he mentioned, indicating that this step was shocking to the gold markets, which were expecting Canadian interest rates to remain stable at their previous levels.
Although the global economy was not affected by the decision of Bank of Canada, it increased the fears of investors in precious metals that other economies and central banks would follow the same step and raise interest rates, which would negatively affect gold’s price, he stated.
Gold futures for next August delivery fell by 0.1 percent, or the equivalent of USD 1.4, to reach USD 1,977.2 an ounce, reducing its weekly gains by half a percent, while the dollar index, which measures the performance of the US currency against major currencies, recorded a decline of 0.2 percent with 103.5 points, he noted.
Regarding the local market, Al-Fadhli said that the price of a 24-carat gram gold amounted to KD 19.55, while a 21-carat gram was KD 17.1, whereas the silver price reached KD 286 per kilogram.
The ounce is one of the units of measurement of mass, which is equal to 28.349 grams, while a troy ounce of gold equals 31.103 grams.
Source: Kuwait News Agency