Tim Waterer, chief market analyst at KCM Trade, said any sign of lower inflation would weaken the U.S. currency, due to expectations from the Federal Reserve for interest rate cuts, which could lead to a rise in gold.
Waterer added that gold would be among the “main beneficiaries” if there were further signs of weakness in the US economy, and prices could hit $2,100 sooner rather than later.
Markets are also in a state of uncertainty, pending the outcome of negotiations between the White House and Republican members of the US Congress to approve raising the debt ceiling, so that the country is not exposed to a default on its debts, for the very first time, which, if it occurs, would trigger a wave of expected losses, in the world markets, and warns of an impending catastrophe which threatens the world economy, as warned US Treasury Secretary Janet Yellen.
Economic uncertainty and low interest rates increase the demand for non-performing bullion.
price movements
Gold rose in spot trading, 0.2%, to $2,020.80 an ounce, at 0634 GMT. And US gold futures rose 0.2% to $2,029.30.
The dollar index fell 0.1%, making the yellow metal more attractive to overseas buyers.
As with other precious metals, silver rose 0.1% in spot trading to $25.67 an ounce.
Platinum rose 0.5% to $1,064.03 and palladium rose 1.5% to $1,513.11.
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