At 12:28 GMT, XAU/USD $ 2778.78, an increase of $ 23.92 or +0.87%.
Spot gold has risen steadily this week and marks the highest level since October. If the prices last, this would be the fourth consecutive weekly profit for the precious metal. The rally was reinforced by the recent calls of US President Donald Trump for lower interest rates and his suggestion for a softer attitude towards the Chinese rates, so that the US dollar was printed to the lowest level in one month. A weaker dollar is usually in favor of gold, because it becomes more affordable for foreign buyers.
The power of gold also reflects broader concerns about global economic uncertainty and inflation pressure, since Zero-Yield precious metal remains a favorite cover in periods of market volatility. Trump’s comments at the World Economic Forum in Davos, in which he called for immediate interest reductions, fueled the speculation in the run -up to the Federal Reserve meeting next week, although policy makers are expected to keep the interest unchanged.
The interest on government bonds is falling due to worries about inflation
The interest on US government bonds fell on Friday after Traders had processed Trump’s statements and had waited for upcoming economic data, including the S&P Global Composite PMI and existing houses sales. Blackrock CEO Larry Fink noted that Trump’s budget policy could stir up “new inflation pressure”, which could possibly lead to higher interest rates. Fink predicted a return on ten -year government bonds of 5.5% if inflation accelerates, which could challenge stock markets and at the same time support gold indirectly.