Saturday, 25 June 2022 | 11:57 WIB

Gold Price Continues Uptrend for Fourth Day as US Dollar Weakens

Gold Price Continues Uptrend for Fourth Day as US Dollar Weakens (flickr/marcoverch)

JAKARTA, NETRALNEWS.COM - The price of gold has edged up close to a four-month high at the end of trading on Tuesday local time, or Wednesday (05/19/2021) morning Indonesian Western Time (WIB). The gold price uptrend has extended gains for a fourth straight day, as a weaker dollar and inflation concerns continue to maintain the precious metal's appeal.

The most active gold contract for June delivery on the Comex division of the New York Exchange climbed up by 0.4 US dollar, or 0.02 percent, to close at US$1,868 dollars an ounce. The day before, Monday (05/17/2021), gold futures price rose by $29.5 or 1.6 percent to $1,867.60.

Gold futures also jumped by $14.1 dollars or 0.77 percent to touch $1,838.10 on Friday (05/14/2021), after strengthening by $1.2 or 0.07 percent to become $1,824.00 on Thursday (05/13/2021), and fell 13.3 US dollars or 0.72 percent to $1,822.8 on Wednesday (05/12/2021).

"Bond yields have only gone up one notch," said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

“The weaker dollar has provided most of the support. (However) gold is doing pretty well, but it's not in a bullish market at all."

The yield on the 10-year US government bond, which was used as a benchmark, edged higher, increasing the chance of losing a hold of gold that did not provide a yield or interest rate.

The dollar index, which measures the greenback against six major peers, fell almost a three-month low, making gold more affordable for holders of other currencies.

"The narrative is clearly shifting towards inflation ... but perhaps more critically, you've got a weaker US dollar, which is probably the main and important driver," said Ross Norman, an independent analyst.

Analysts also noted that inflows of gold-based mutual funds or gold exchange-traded-funds indicated investors were buying precious metals to hedge against inflation concerns.

After rising prices in the United States, the minutes of the Federal Reserve's latest policy meeting are expected to provide further clarity on the outlook for monetary policy and the views of policymakers on inflation. The US central bank will release the minutes on Wednesday local time.

"The Fed will not be tempted to rock the boat in terms of a recovery which is gathering some momentum. "Raising interest rates or discussions about reducing the bond-buying program (tapering) might be counterproductive at this stage," said Norman.

Gold also found support from chart-based buyers after it broke above its 200-day moving average, which is considered a bullish signal.

As quoted by Antara, the price of silver for delivery in July rose 5.9 cents, or 0.21 percent, to close at 28.333 per ounce. Platinum for July delivery fell 19.2 dollars, or 1.54 percent, to close at $1,225.30 dollars an ounce.