The gold price rose yet again on Friday as the dollar index fell. The US Federal Reserve hinted at pausing interest rate hikes if the US economy shows signs of slowing down. Meanwhile, investors are keenly observing the progress made in the US-China trade talks.
The resulting uncertainties are creating ideal conditions for the precious metals market. Gold rates for spot gold increased by 0.4 percent to $1290.84 for an ounce, giving it the fourth consecutive weekly gains. The US gold futures spiked by a further 0.2 percent, and traded at $1,289.40 for an ounce.
Investors are trying to cut their losses by spending more on the bullion to prepare for geopolitical instabilities. The political ecosystem in the US is hinting towards a further economic disruption, the worst of which might occur toward the end of 2019 and 2020.
The US government shutdown is well into its 20th consecutive day, which isn’t doing the dollar index, which measures the value of the US dollar against other currencies, any favors. President Donald Trump made threatens that if push comes to shove, he might be forced to use his emergency powers to forego US Congress in order to fund his wall alongside the US-Mexico border.
The only market factor that might push gold prices back down is a potential truce between the US and China trades, which will bolster the stock market.
This means that gold might just test short-term resistance at $1,310 for an ounce while spot gold could test resistance at $1,311.
The precious metals market as a whole is on the rise, with palladium jumping by 0.4 percent to $1,326.75 an ounce, beating the lustrous gold by a large margin. Silver rates went up by 0.6 percent to trade at $15.65 for an ounce. Platinum prices, another rare metal with attractive properties, had a bad year in 2018, but increased by 0.2 percent at $821.60 for an ounce.
Domestic prices for gold in India have also kept up pace with global trends, with 22 and 24 carat gold increasing in value by about Rs. 150 to trade at Rs. 31,530 and Rs. 32,700 per 10 grams respectively. This is because of increased spending by local jewelers who anticipate increased demand as the wedding season in India approaches.
It is also widely believed that the growth spurt for gold in India will be encouraged by helpful government policies such as the recent tweaks to the Gold Monetization Scheme (GMS).