Gold prices hit a one-week high on Wednesday as the US dollar weakened, following US President Donald Trump’s attack on the Federal Reserve on interest rates. Spot gold rose 0.2% to trade at $1,197 an ounce, its highest level since August 14. US gold futures rose 0.3% to $1,203.
USD’s sell off continued until early Wednesday after US President Donald Trump’s criticism of the Federal Reserve Chairman on his comments to raise interest rates.
Trump’s criticism comes as investors are expecting the minutes of the August monetary policy meeting on Wednesday and the bank’s annual symposium at Jackson Hole in Wyoming later this week.
Gold is highly sensitive to US interest rates rising because it increases the opportunity cost of metals that do not have returns while enhancing the dollar.
The dollar index, which measures the strength of the greenback against a range of major rivals, fell 0.1% after hitting a low of 95.08 points at a previous session this week. The general rule is that the weak dollar strengthens the price of the dollar denominated gold.
US financial markets are also focused on a US-China trade meeting expected this week, although Trump indicated on Monday that he does not expect much progress in talks with Beijing.
SPDR Gold Trust, the world’s largest gold backed ETF, fell 0.46% to 768 tons Tuesday from 772 tons on Monday. South Africa’s National Union of Mineworkers said on Tuesday that wage negotiations in the gold sector had reached a deadlock.
South Africa’s Harmony Gold reported a 43 percent drop in annual profit on Tuesday, weighed down by impairments and a dollar debt loss.
Data from the Swiss customs bureau showed that Switzerland’s imports and exports of gold fell in July.
In Russia, the gold and silver producer Polymetal said on Tuesday that its net income rose 46 percent year-on-year to $175 million in the first half of 2018 due to higher production and sales.
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