US Economic Policy Influences Gold Prices

Thoughtco

Gold.

Gold prices rose during Asian trading on Wednesday, driven by mounting concerns over excessive fiscal spending in developed economies — particularly Japan — which has boosted demand for safe-haven assets.

The precious metal also gained support from uncertainty surrounding a possible interest rate cut by the US Federal Reserve in December, amid signs of a weakening labour market and ahead of the release of the minutes from the Fed’s October meeting.

Khoshnaw Omar, a jeweller in Sulaymaniyah, told PUKMEDIA: “The increase in gold prices is directly linked to US economic policy. When the United States senses rising inflation, it raises interest rates.”

He added: “Another tactic adopted by the United States is promoting gold in global markets, which has resulted in the sale of large quantities of gold and the return of significant amounts of US dollars. This has helped to curb economic inflation.”

He noted that the instability and sharp fluctuations in gold prices have caused substantial losses for many individuals and gold traders. Meanwhile, spot gold rose by 0.6% to $4,092.51 an ounce, while December gold futures increased by 0.7% to $4,093.79 an ounce.



PUKMEDIA