Gold began to rise in spot transactions by more than 2%, exceeding the level of $4,616 per ounce. This momentum was not limited to spot gold only, but also extended to futures contracts that recorded similar jumps, putting the yellow metal on track to achieve weekly gains for the third week in a row.
There are many reasons, but the common link is “the weakness of the dollar.” The index, which measures the performance of the US currency against a basket of major currencies, fell to about 98.84 points, which made possession of gold less expensive and attractive to investors.
This decline was driven by a new “code word” from the US Treasury Department, which revealed a plan to double long-term bond repurchases, in an attempt to pump liquidity into the debt market. It is a move that investors read as an additional signal to strengthen the strength of gold as a hedge.
Observers at TD Securities believe that the breach of current technical levels was not a coincidence. All eyes are now on a new target: the $4,700 level. A goal that may be achieved if the current momentum in the debt market continues and the US currency remains under pressure.
While the question remains outstanding: Will this rush succeed in challenging the current interest rates approved by the Federal Reserve, or does the economic scene have other chapters?
