Gold rises as the dollar declines and inflation fears ease

Gold prices rose today, supported by the decline in the value of the dollar and the decline in energy prices after US President Donald Trump indicated the possibility of the war in the Middle East ending soon.

The potential decline in inflation resulting from the war is likely to reduce the possibility of central banks raising interest rates, which is a positive factor for non-yielding gold.

The price of gold in spot transactions rose 0.5 percent to $5,161.54 per ounce by 04:29 GMT.

US gold futures for April delivery also rose 1.3 percent to $5,171.10.

The dollar fell 0.3 percent, making gold priced in the US currency cheaper for holders of other currencies.

Kelvin Wong, chief market analyst at OANDA, said, “Gold prices rose as a result of US President Trump’s own statements, in which he indicated the possibility of de-escalation… Therefore, we may see a decline in potential inflation expectations in light of this sharp decline in oil prices.”

Oil prices fell by more than 10 percent following Trump’s statements.

Gold is seen as a hedge against inflation, but low interest rates enhance its appeal as a safe haven.

Markets are now awaiting the US Consumer Price Index for February, scheduled for release tomorrow, Wednesday, and the Personal Consumption Expenditures Index – the Federal Reserve’s preferred measure of inflation – on Friday.

As for other precious metals, the price of silver in spot transactions rose 1.4 percent to $88.25 per ounce.

The price of platinum fell 0.2 percent to $2,177.02, and the price of palladium fell 0.9 percent to $1,675.58.