Gold jumped to a 3 month high today, snapping a 3-day losing streak today after traders digested yesterday’s minutes meeting from the US Federal Reserve.
At 7.39pm (GMT) the price was trading at $1249 up from $1237 in yesterday’s close.
Although the fed noted in their latest minute that it would be appropriate to raise rates “fairly soon” , the statement wasn’t enough to impress investors who were expecting a more hawkish stance and now believe a rate hike in march may be off the table.
“The dollar weakness is one the primary reason that we are seeing this rally. Moreover, what traders are looking at is the probability of a rate hike in March and it is not great at all,” said Naeem Aslam, chief market analyst with Think Markets.
“This sentiment is providing a lot of tailwind for gold.” he added.
The Gold price also rallied after the January fed minutes but then pulled back and analysts are wondering whether this time round the rally is for real,
"Gold rallied after the January Fed minutes suggested that voting members were relaxed about having 'ample' time to respond to inflation pressure," said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York.
"It remains to be seen if their sanguine outlook has given the recently tentative gold bull the testosterone shot it needs to break decisively higher." he added.
A speech by Donald Trump next week to the US congress where he is expected t to outline some of his policies may keep a floor under the gold price until the US president brings more clarity to just what he intends to do.