Gold closes higher with weak dollar and Treasury interest rates
Gold ended higher this Friday (26), benefiting from the weakness of the dollar and Treasury interest rates as the market assesses the monetary policy outlook for the United States and follows new developments in the Middle East.
On Comex, the metals division of the New York Stock Exchange (Nymex), gold for August ended the day up 1.2%, at US$4,096.30 per troy ounce, but fell around 3.52% in the week.
July silver rose 1.5% on the day to $59.22 per troy ounce, but fell approximately 11% for the week.
Despite still falling back to the US$3,900 level at the session's lows, gold recovered and surpassed the US$4,000 range.
The metal's recent falls still weigh on sentiment, explains Saxo Bank. In the same vein, TD Securities reinforces that investors will continue to monitor the price level, as a drop to US$3,800 could trigger a new selling wave.
In addition, gold is also affected by deteriorating risk sentiment, especially regarding assets linked to artificial intelligence (AI), according to Capital Economics. The metal's growing correlation with the stock market is one of the reasons why the consultancy believes that gold prices still have room to fall over the next eighteen months.
Still, the decline in energy prices and the fall in Treasury yields should benefit the metal, according to Saxo Bank. The factors "may eventually ease pressure on the Federal Reserve to tighten monetary policy further, potentially offering some support to the precious metal," he explains.
In the geopolitical scenario, however, United States President Donald Trump accused Iran of violating the ceasefire by launching drones against vessels in the Strait of Hormuz. Furthermore, the Iranians intercepted ships that were following maritime routes not authorized by the country's authorities.
*With information from Dow Jones Newswires
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Source: CNN