Gold prices after increased for the second consecutive session as the US dollar weakened.
The move came after a recent policy meeting of the Federal Reserve gave no indication whether interest rates in the US would rise or note. This sparked spot gold to improve by 0.1 per cent to $1,327.40 (£774.88) an ounce by 06:46 BST on Thursday (July 10th). It followed a 0.5 per cent rise in the previous session enhanced by a declining dollar which recorded a one-week against other currencies.
Thanks to the weaker dollar the interest in commodities is heightened as holders of other currencies see more value in the likes of gold and silver. There had been concern over the gold price as the US' jobs report suggest that there could be an increase in interest but the minutes from the Federal Reserve did not give such details.
If the US was to raise its interest rate it could prompt investors to withdraw money from non-interest-bearing assets such as gold and therefore hamper the price of the commodity. India has also been highlighted as a major player within the future of gold.
Speaking to Reuters, a precious metals trader said: "If gold can break resistance at $1,335, then it can go all the way to $1,380. The weaker dollar after the Fed minutes is helping. People are watching India today to see if there will be any cut in import duty, though a reduction is already priced in."
In the UK there has been a focus on possible gold price rigging however a recent investigation found no evidence of this. Responding to question from the Treasury Select Committee, head of markets infrastructure and policy at the Financial Conduct Authority explained that while it was possible for banks to set the gold price benchmark there was no proof that it was being carried out.
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