Gold was in positive territory on Friday morning in London after the dollar eased slightly amid growing expectations that the path to higher interest rates in the US will be a slow one.
The spot gold price was last at $1,054.9/1,055.2 per ounce, up $2.20 on Thursday’s close. Trade has ranged from $1,051.2 to $1,058.1 so far. In the previous session, the yellow metal dipped below $1,050.
The dollar rose smartly yesterday after the US Federal Reserve raised interest rates for the first time in almost a decade. But the greenback has since eased to around 1.083 against the euro – the Fed’s 25-basis-point rise to 0.5 percent is unlikely to be repeated soon, according to market consensus.
“Now the Fed has made its first move and further tightening is likely to be gradual, we feel the run-up in the dollar over the past 18 months has probably already priced into the first few interest rate rises,” FastMarkets’ William Adams said. “This means the dollar may struggle to climb further in the short term.”