Gold prices rose Thursday, June 8, supported by the weakness of the dollar, but the yellow metal hovered near the low levels it recorded in the previous session, as investors await indications from the US Federal Reserve after the Bank of Canada raised interest rates to the highest level in 22 years.
And by 03:07 GMT, spot gold rose 0.4% to $1946.47 an ounce, after falling 1% in the previous session. US gold futures rose 0.1% to $1,961.00.
Ajay Kedia, director at Kedia Commodities in Mumbai, said that gold is supported by expectations that the US Federal Reserve will keep interest rates unchanged next week, while gold prices are stuck in a range between 1930 and 1985 dollars, and may break through the upper range as soon as the US Central Bank decides to do so.
Economists polled by Reuters said the US Federal Reserve will not raise interest rates at its scheduled meeting on June 13-14, for the first time in more than a year.
On Wednesday, the Bank of Canada raised its key overnight interest rate to a 22-year high of 4.75%, and markets and analysts immediately expected another hike next month to curb soaring inflation.
US Treasury Secretary Janet Yellen said the US economy is strong with active consumer spending, but some areas are slowing, adding that she expects to continue making progress in reducing inflation over the next two years.
A report on US consumer price inflation for May, due on June 13 before the central bank meeting, will give investors greater clarity on the strength of the world's largest economy.
High interest rates weaken the attractiveness of non-yielding gold.
As for other precious metals, silver rose in spot transactions by 0.3% to $23.53 an ounce, platinum rose 0.2% to $1020.13, and palladium rose 0.4% to $1394.91.
