Gold inches up

The Herald (Zimbabwe) - - Business -

BEN­GALURU. — Gold edged higher yes­ter­day as the US dol­lar weak­ened against other cur­ren­cies on bets that cen­tral banks in Europe were pre­par­ing to scale back mon­e­tary stim­u­lus, but the bul­lion’s gains were capped by a surge in eq­ui­ties.

The dol­lar in­dex, which tracks the green­back against a bas­ket of six ma­jor ri­val cur­ren­cies, fell to its weak­est since early Oc­to­ber yes­ter­day at a low of 95.685.

A weaker green­back makes dol­lar-de­nom­i­nated gold cheaper for hold­ers of other cur­ren­cies and can in­crease demand.

Spot gold rose 0,1 per­cent to $1 249,79 per ounce at 0740 GMT. US gold fu­tures for Au­gust de­liv­ery rose 0,1 per­cent to $1 249,70 per ounce.

“De­spite the head­winds be­ing gen­er­ated by a weaker dol­lar, more sub­stan­tial gains in gold were held in check on ac­count of the fact that the US stock mar­ket soared on Wed­nes­day,” said INTL FC Stone an­a­lyst Ed­ward Meir.

Meir said the same theme was likely to con­tinue through what was left of the week.

Hawk­ish com­ments from Euro­pean Cen­tral Bank Pres­i­dent Mario Draghi, and Bank of Eng­land Gov­er­nor Mark Car­ney have raised ex­pec­ta­tions of a tighter mon­e­tary pol­icy in Europe.

Draghi ear­lier this week hinted the ECB could trim its stim­u­lus this year, but ac­cord­ing to some sources his re­marks were in­tended to sig­nal tol­er­ance for a pe­riod of weaker in­fla­tion and not im­mi­nent pol­icy tight­en­ing.

Gov­er­nor Car­ney said on Wed­nes­day, though, a rise in Bri­tish in­ter­est rates is likely to be needed and the Bank of Eng­land will de­bate when to do so “in the com­ing months”. — Reuters.

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