Gold prices recovered from previous declines as dollar steadies

gold pushes

The price of gold started Wednesday’s session higher, recovering from an almost 1 percent decline on its last settlement. The yellow metal was somehow lifted by the possible drop of the greenback.

Looking at current prices, U.S. gold futures edged up more than 0.1 percent to finish at $1,307.60 an ounce for its June delivery. Meanwhile, spot gold was 0.2 percent higher on the day to settle at $1,306.51 an ounce. On the previous day, spot touched its weakest level since December 29 at $1,301.51 an ounce.

The index which measures the value of the greenback against its major peers, the U.S. dollar index, is almost unmoved at 92.446. The index was backed by the recent rise of U.S. Treasury yields and expectations of a strong economy in the United States. However, it is highly expected to decline to its lowest level this year.

It is already given that gold prices are benefiting from the dollar’s decline because it will make the non-yielding bullion cheaper for holders outside the United States, therefore improving the demand.

According to the GDPNow forecast model of the Atlanta Federal Reserve on the previous day, the economy of the U.S. has been expanding at a 4.1 percent annualized rate in this year’s second half. The U.S. government said that construction spending dropped last March and also revised their building activity data for February.

SPDR Gold Trust said yesterday that its holdings dropped by 0.51 percent to 866.77 tones.

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