The price of each ounce of gold for immediate delivery increased by 0.8% to $4295.26. This increase comes as the price of this precious metal had reached its lowest level in about 6 weeks during Wednesday's trading. In this regard, analysts believe that technical factors are currently influencing the gold market.
Oil Market Volatility and Its Impact on Gold
Alongside the increase in gold prices, oil prices decreased in today's trading and continued their downward trend. Kelvin Wang, a senior market analyst at OANDA, emphasized that oil prices remain a key factor to watch. If the downward trend in oil prices continues, this could support gold prices at least in the medium term. Until such an event occurs, gold prices are expected to fluctuate within a specific range.
Read more: Historic Drop in Natural Gas Prices in New England Due to Abundant Supply from Appalachia and Canada
The Impact of Interest Rates on Gold
High interest rates are considered an effective factor in reducing the attractiveness of gold as a non-yielding asset. The Federal Reserve raised interest rates on Wednesday and indicated the possibility of further increases in the coming months. Kevin Warsh, the head of the U.S. Federal Reserve, also joined the unanimous decision of the Federal Reserve members. This decision effectively confirms the Trump administration's inability to control inflation, and policymakers are concerned about its escalation.
According to updated seasonal economic forecasts, 16 out of 18 policymakers expect interest rates to increase by at least 25 basis points once more by the end of this year, with only two of them predicting that rates will remain stable thereafter. Meanwhile, the Bank of England is also likely to keep interest rates steady on Thursday, but investors are awaiting any signs that rising energy prices may prompt this bank to follow the Federal Reserve's actions.
In the market for other precious metals, the price of each ounce of silver increased by 1.2% to $63.73. Additionally, the price of each ounce of platinum rose by 1.7% to $1783.56, and each ounce of palladium increased by 2.2% to $1296.70.
