Gold prices are falling due to the pressure of the dollar’s strength

0
647

Gold prices fell under pressure from the dollar’s strength on Friday, but it varies around the highest level in 5 months and is heading to record the best weekly gain in 6 months, supported by US inflation data.

-Advertisement-



And by 8:20 (GMT), the yellow metal fell in spot trading by 8.43 dollars, or 0.46 percent, to 1853.14 dollars an ounce.

And US gold futures fell $8.65, or 0.47%, to about $1,855 an ounce.

And gold prices on Friday were more than 5% higher than they closed last week, in the best weekly gain since May 2021.

Gold’s gains were capped by a strong dollar rally, reaching a peak of more than a year.

The dollar index, which measures the performance of the US currency against a basket of six major competing currencies, recorded a slight decrease.

It is down 0.02 percent on Friday, but remains at its highest level since October in 2020.

-Advertisement-



A strong dollar would reduce the attractiveness of gold to holders of other currencies.

The dollar and gold rose in a rare move in parallel, after data on Wednesday showed a more-than-expected rise in annual inflation in the United States to 6.2 percent in October, the highest level in 31 years.

Rising inflation has boosted speculation that the US Federal Reserve will start its interest rate hike plans, which has supported the dollar in the long term.

At the same time, accelerating US inflation has increased investors’ appetite for gold as a hedge and a value preserver.

And since March 2020, the Federal Reserve has kept interest rates at a historically low level within the range of zero-0.25% in the face of the repercussions of the Corona pandemic, and insisted that the rise in inflation is “temporary.”

-Advertisement-



However, US President Joe Biden’s statements on Thursday were that “reversing the upward trend of inflation is my top priority.”

This has increased bets that the Federal Reserve will raise interest rates earlier than expected by the end of 2022.