Gold Surges Amidst Weaker Dollar as Traders Anticipate US Economic Data

Gold prices increased due to a weakened dollar, as investors awaited US economic data that could offer insights into the Federal Reserve’s interest rate strategy.

At 11:22 a.m. in London, spot gold was up 0.6% at $2,648.37 an ounce, following a decline in both the dollar and Treasury yields. A softer dollar makes precious metals cheaper for buyers using other currencies, enhancing their attractiveness.

Market participants are now looking forward to a range of pre-Thanksgiving economic data from the US, including the Federal Reserve’s favored inflation measure, initial jobless claims, and updates on economic growth. According to the minutes from their most recent policy meeting, Fed officials expressed a preference for a cautious stance on rate reductions.

Earlier in the week, gold prices declined following an agreement between Israel and Hezbollah on a 60-day halt to hostilities, which began early Wednesday. A decrease in geopolitical tensions generally impacts gold negatively, reducing its status as a safe haven asset.

Despite the recent dip, the precious metal has risen over 28% this year, even after a decline this month triggered by a dollar rally following Donald Trump’s election victory.

On Wednesday morning, silver prices remained stable, while both platinum and palladium saw increases. The Bloomberg Dollar Spot Index fell by 0.4%.

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