Latest gold, forex rates in UAE: Gold hits 15-month highs
Dubai-UAE (May 1) Gold prices rallied 2 per cent to their highest since January last year on Friday as the Bank of Japan’s decision the previous day to hold off expanding monetary stimulus weighed heavily on the dollar, and European and US stocks fell.
Spot gold closed the week and month at $1,292.76 an ounce, having reached a 15-month high of $1,296.76.
US gold futures for June delivery settled up 1.9 per cent at $1,290.50 an ounce.
The yen hit an 18-month peak versus the US currency and was on course for its biggest weekly gain since the 2008 financial crisis, with poor US growth and the Federal Reserve’s cautious stance this week weighing on the dollar.
For the week, the metal is up 4.8 per cent in what is set to be its biggest weekly rise since the week ended February 12.
“All the precious metals are up quite strongly on the back of weakness in the dollar, after poor GDP data in the United States and a lack of action by the Bank of Japan,” Capital Economics analyst Simona Gambarini said.
“There could be a correction in the price if the dollar starts strengthening again, but we remain positive on gold.”
The Fed’s policy statement on Wednesday, after leaving interest rates unchanged, also supported gold. The US central bank showed little sign it was in a hurry to tighten monetary policy.
Gold is sensitive to rising interest rates, which lift the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
“We believe we are not transitioning to a risk-off world, but simply to a less risk-on one, as lower real rates should stabilize and require stronger global data to then lift interest rates and risk in tandem,” said TD Securities in a note.