Gold Prices Surge Owing to a Weaker Dollar; Big Gains Projected!
On Thursday, the precious metal witnessed a record hike in past 14-months in European morning hours.
The surge happened, especially owing to a weaker U.S. Dollar. Gold gained around 1.25% amounting to $16.75 for an ounce to reach up to $1268.45. This rise is the highest since past 14-months as revealed by latest reports.
On the other side, Silver also recorded a rally as the prices were up by 1.48% to amount to $17.615 for an ounce. The rise in Silver prices is looked up to as part of a collective hike in prices of all of the precious metals. Copper also recorded a hike of 0.87%, thus amounting to $2.250 for a pound. This data is in connection with July delivery.
What might have Caused the Hike?
From what seems as a major factor in the International market, it has been known that the Central Bank of Japan has unexpectedly agreed to not change some of the major policy interest rates and hold on to the purchase programs at least for now. This in turn has led to buyers coming forward to invest in global equities.
The Central Bank chose to keep deposit rate at -0.1%, which further resulted in pushing back the inflation target at 2%. As far as this decision by BoJ is concerned, it can be looked up to as a consequence of Federal Reserves' decision to leave interest rates unchanged, while simultaneously giving very little information on any rate hikes in the near future.
According to Market Analysts, the U.S. economic growth has slowed down majorly at a rate of 0.5% annually. This decline in pace is one of the most noticeable ones since first quarter in the year 2014. Although nothing can be said as of now as to how well the market sustains this hike until year end but, the current hike in prices of precious metals only goes on to hint at a more strengthened market.