Gold Prices Touch A Multi Week High

Gold prices continued to climb adding another $10 in the Asian session to reach 1163.10. Silver added 33 points to 15.550 while platinum added $2.65 to 1035.30. An unexpected rally in gold prices that was sparked by yuan’s devaluation last week gathered pace, propelling the precious metal to a six-and-a-half week-high this morning. Gold breached the near-term resistance level of 1,150 per troy ounce, showing the price rally has taken a firmer hold of markets than was being earlier anticipated. Gold rose 1.25% from the opening price to an intra-day high of $1,168.32, the highest level since July 3. It is currently trading at 1,164.3.

One of the most renown precious metals forecaster said the Federal Reserve will still raise U.S. interest rates this year and that’ll hurt gold, standing by his outlook even as bullion surged amid a global rout in stocks and commodities.

“The Fed rate-hike story is the key reason as to why we are holding our bearish view for gold at $1,050 an ounce at the end of the year,” Barnabas Gan, an economist at Oversea-Chinese Banking Corp., said on Friday. “The Fed rate hike, if it happens either in September or December, will really be the factor that market watchers are actually looking for.”

Bullion’s risen every day this week, gaining to the highest in more than a month, after Fed policy makers signaled concern over low inflation, prompting investors to scale back bets that rates will rise next month. Stocks, emerging-market currencies and most commodities sank after China devalued the yuan last week and concerns increased that global growth may falter, boosting demand for gold as a haven. Gan’s view suggests these developments won’t prompt the Fed to delay tightening to 2016.

Gold rose to its highest in nearly five weeks on Thursday after minutes from the Federal Reserve’s policy meeting last month signaled that a hike in U.S. interest rates in September may be unlikely.

 Fed officials worried that lagging U.S. inflation and a weak global economy posed too big a risk to commit to a “lift off” on rates, buoying gold that had been out of favor amid an imminent tightening in US monetary policy.

Gold price started to rise after Chinese investors increased investment in the bullion considering it a safe haven after Chinese central bank’s surprising move to the yuan on August 13, saying the move was ‘a response to the market’. Prior to that, the price of gold had started to tumble in the international market in expectation of the US Federal Reserve’s interest rate hike. As per international media reports, US may decide against the rate hike in the near future following the yuan’s devaluation.