Gold Prices Surge 1% Over Heightened Uncertainty in Financial Markets
Arslan Butt • 1 min read
A weakening US dollar and escalating uncertainty in markets caused GOLD prices to gain 1% on Thursday. Most of the risk-off sentiment in markets was driven by the US-China trade war which caused a decline in stock markets and crude oil.
At the time of writing, Gold is trading at around 1283, a nice jump from touching the lows at around 1268 on May 3. The dollar index also weakened on Thursday over rising fears that the Fed could cut interest rates soon due to the US economy possibly slowing down as a fallout of the escalating trade tensions.
When the Fed lowers interest rates, it makes gold more attractive to investors as it lowers the opportunity cost of holding money in the form of bullion. Lower yields and equities are also boosting the safe haven appeal, supporting gold prices.