Gold Prices Edge Higher as Dollar Weakens
*Published by Kitco News*
February 23, 2023
Gold prices edged higher on Thursday as the US dollar weakened, making the precious metal more appealing to buyers holding other currencies.
As of 11:50 AM EST, spot gold was up 0.4% to $1,836.70 per ounce, while April gold futures were trading 0.4% higher at $1,844.30 per ounce.
The US dollar index, which measures the greenback’s value against a basket of six major currencies, fell 0.2% on the day. A weaker dollar makes gold more affordable for investors holding currencies that have appreciated against the dollar.
Gold has been consolidating in a narrow range in recent weeks as investors await new economic data that could provide clues about the future path of monetary policy.
“The market is waiting for the next catalyst,” said David Meger, director of metals trading at High Ridge Futures. “We’re in a bit of a holding pattern right now.”
Investors will be closely watching the release of the US Federal Reserve’s minutes from its latest policy meeting on Wednesday. The minutes could provide insights into the Fed’s thinking on inflation and interest rates.
“If the minutes show that the Fed is still hawkish and committed to raising rates, that could weigh on gold prices,” Meger said. “But if the minutes are more dovish, that could provide some support for gold.”
Other factors that could influence gold prices in the near term include the ongoing war in Ukraine and geopolitical tensions between the US and China.
“Gold is still seen as a safe haven asset in times of uncertainty,” Meger said. “If there is a major escalation in the war in Ukraine or tensions between the US and China, that could provide some support for gold prices.”
Technical Outlook
Gold prices have been holding above their 200-day moving average, which is a technical indicator of long-term support.
“The 200-day moving average is a key technical level for gold,” Meger said. “If gold can hold above this level, that could provide some technical support for the market.”
On the upside, gold prices face resistance at the $1,850 per ounce level. If gold can break above this level, that could open the door to a move towards $1,900 per ounce.
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