Gold prices jumped; Values could go higher
GOLD PRICES have jumped this week – and could go higher – after the dollar weakened amid lower expectations of rapidly rising US interest rates, sad experts.
The precious metal saw its value push to a two-week high of $1,230 on Friday, driven by a lower US currency following a cautious update by the US Federal Reserve.
Experts forecast the metal’s price could reach $1,250 in the coming weeks, after the American central bank dampened hopes of more than three interest rate hikes in 2017.
Gold’s value tends to rise in times of market volatility and when the dollar weakens.
The US currency has been knocked this week by the Federal Reserve’s current outlook.
However, the dollar is expected to stay strong in the longer term, as America is one of the few countries tightening monetary policy.
Therefore, gold prices are set to be capped, predicted experts.
FXTM research analyst Lukman Otunuga said: “Gold has staged a sharp rebound this week with prices springing above $1230 after the Federal Reserve signalled a more gradual pace of monetary tightening in 2017 then what markets anticipated.
“The ‘dovish hike’ and caution displayed by the Fed simply disappointed many hawks consequently exposing the dollar to downside shocks.
“Although bulls have exploited dollar’s weakness to elevate gold, gains could be limited in the longer term if the Fed readopts an aggressive stance.
“With sentiment towards the U.S economy firmly bullish, the dollar remains supported consequently capping gains on gold in the medium to longer term.
“From a technical standpoint, although prices are turning bullish on the daily charts, the $1240 regions could act as a checkpoint for bears to attack prices lower.”