Individuals who trade gold might be interested in the precious metal’s recent climb above $1,300 per ounce, as well as the factors that helped drive this appreciation.
Spot gold rose to $1,301.76 an ounce by 14:03 GMT on May 19, which represented a 0.7 percent gain for the session, according to Reuters. At this time, the dollar was 0.1 percent lower compared to a basket of other currencies. Gold tends to have an inverse relationship with the greenback.
In addition to the key role that the falling dollar played in bolstering the precious metal, anticipation surrounding the future policy moves of the European Central Bank was cited as having an impact on the value of gold, the media outlet reported.
Market participants will also look to the minutes released after the Federal Open Market Committee meeting to see any change that these key government officials are going to make, according to MarketWatch.
Individuals who trade gold have been scrutinizing the statements of central banks for the last several years. Many consider the precious metal to be an inflation hedge, and if the central banks announce a slowing of their quantitative easing, this development will cause the money supply to grow less quickly.
This in turn could give market participants less reason to buy gold in order to protect themselves against the possibility of sharp rises in the price level.