Gold Rises to Near Two-Week High as Dollar Weakens

By Gina Lee

Gold prices rose on Monday morning in Asia, reaching a near two-week high as the dollar weakened, which countered speculation that the U.S. Federal Reserve could soon begin tapering its asset purchases.

As of 10:21 PM ET (2:21 AM GMT), gold climbed 0.15% to $1,761 after peaking at $1,765.54, the highest level since September 23. The dollar index, which typically moves inversely to gold, fell to its lowest point since September 29.

According to Philadelphia Fed Bank President Patrick Harker, the Fed may be nearing the inflation targets necessary for raising interest rates. However, he indicated that it might take a year or longer for the central bank to achieve its employment goals before considering an interest rate hike.

Cleveland Fed Bank President Loretta Mester also spoke about interest rates, suggesting that the conditions for a hike could be met by the end of 2022, with inflation expected to return to the Fed’s target during that timeframe.

Investors are also looking forward to several central bank policy decisions, with one bank set to announce its policy on Tuesday, followed by another the next day, and a third making its announcement on Friday.

The SPDR Gold Trust reported a 0.4% decrease in holdings to 986.54 tons on Friday. Additionally, data from the U.S. Commodity Futures Trading Commission indicated that speculators cut their net long positions by 19,471 contracts, bringing the total to 42,123 for the week ending September 28.

Meanwhile, demand for physical gold saw an uptick in China, the top consumer, last week, while activity also increased in other Asian financial centers, including Singapore.

In other precious metals, both silver and platinum rose by 0.4%, while palladium experienced a slight increase of 0.1%.