The gold price rose on Thursday as the US bond yields fell and the Bank of England warned the United Kingdom’s economy could be headed for a recession later this year with inflation rising as high as 13%. XAU/USD has pushed don within its weekly bullish correction to mark a high of $1,794.23. Gold for December delivery was printing above $1,800 per ounce.
Gold has been profiting from softer US bond yields, bullish for gold since it offers no yield. The US 10-year note was last seen paying 2.699%, down 0.26% on the day. The US dollar was lower against most major currencies on Thursday, down some 0.5%. The positive impact of hawkish Federal Reserve comments disappeared this week while investors waited for more signs on the data front. Friday’s Nonfarm Payrolls and next week’s inflation data will be critical.
The Fed hiked rates by 75 basis points at its meeting in June and July. For now, the markets are pricing in a 50 basis point hike at the Fed’s September meeting, and a roughly 44% chance of another massive 75 bps increase. Today, Loretta J. Mester, president of the Federal Reserve Bank of Cleveland said on Thursday that the Fed should raise interest rates to above 4% in order to bring inflation back down to target.
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