LONDON (dpa-AFX) – The price of gold rose significantly on Wednesday. Evidence of a possible easing of tensions in the Middle East supported the prices. The price of one troy ounce (about 31.1 grams) of the precious metal rose by 3.42 percent to $4,713. This is the highest level in over a week.
A report by the US news portal Axios recently provided a significant boost, according to which the USA is close to reaching an agreement with Iran on an agreement to end the war. This placed a significant burden on oil prices and dampened inflation expectations, which had recently risen significantly.
The gold price benefited from the development. At the beginning of the war, the changed interest rate expectations had weighed on gold prices. It is currently expected that the US Federal Reserve will not initially lower its interest rates. Gold does not generate any ongoing interest and therefore becomes less attractive compared to fixed-interest securities. The European Central Bank is expected to raise key interest rates. If there is a lasting easing of tensions in the Middle East, oil prices are likely to fall further and inflation expectations will fall sharply. This would also lower interest rate expectations.
The gold price also benefited from the lower dollar exchange rate. Precious metals are traded in dollars. A lower dollar exchange rate lowers prices for investors in other currency areas and supports demand.
With the positive sentiment for gold, silver also rose. The price of a troy ounce rose by 6.3 percent to 77.46 dollars./jsl/la/stk
