Gold hits a monthly high amid weakening dollar, weekly rise expected

Gold prices reached a monthly high on Friday, supported by a weaker US dollar, which also pushed bullion prices up for the third week in a row.

Spot gold rose 0.2% to $1,871.28 an ounce as of 02:14 GMT, the highest level since May 9. Gold prices are up about 1% this week.

US gold futures also edged up 0.2% to $1,874.50.

The dollar weakened, making dollar-priced bars more attractive to international buyers.

“We think prices have seen an important low around $1,828 this week, and with bullish momentum having returned, a move towards $1,900 seems feasible,” City Index senior market analyst Matt Simpson commented.

Gold prices edged up more than 1% on Thursday, helped by the dollar’s fall and data showing US private sector jobs rose less than expected last month.

Signs of an economic crisis could support demand for gold as investors see it as an asset that performs well during times of global economic turmoil and also protects against rising inflation.

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“We also note that large speculators and managed funds increased their net-long exposure to gold last week, for the first week in six, which suggests there’s support at lower levels,” Simpson said.

At the same time, the US Federal Reserve intends to continue tightening monetary policy, raising interest rates by half a percentage point expected at each of the next two meetings.

Higher short-term interest rates in the US increase the opportunity cost of owning gold that does not earn interest.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.1% to 1,066.04 tons on Thursday from 1,067.20 tons in the previous session.

Spot silver, which gained 0.5% to $22.39 an ounce, is up 1.4% this week.

Platinum added 0.2% to $1,024.57 and is expected to rise about 7.4% weekly, the highest since May 2021.

Palladium edged up 0.5% to $2,064.20.