Gold prices rose on Thursday to their highest level in more than three weeks, with dollar and bond yields reaching their lowest levels in several months, amid increasing bets that the Federal Reserve (the US central bank) will begin lowering interest rates next March.
Gold in spot transactions increased 0.5 percent to $2,086.69 per ounce by 0406 GMT, its highest level since December 4, when prices jumped to a record level of $2,135.40. Prices are on track to record their highest gains in three years, with an increase of 14 percent.
US gold futures rose 0.2 percent to $2,096.50 an ounce.
Kyle Rodda, a financial markets analyst at Capital.com, said that the decline in both returns and the dollar reflects the decline in risks associated with interest rate fluctuations.
Lowering interest rates reduces the opportunity cost of holding non-yielding bullion.
The dollar index fell to its lowest level in five months, which also increased the attractiveness of gold. The index is heading towards its worst annual performance since 2020.
As for other precious metals, silver rose in spot transactions by 0.7 percent to $24.42 per ounce and is heading to end the year with annual gains of approximately two percent.
Platinum contracts rose 0.2 percent to the highest level in more than six months at $999.00.
Palladium also increased 0.2 percent to $1,156.16, but is on track to record the largest annual decline since 2008.
