World gold price soars

 World gold price soars

Fear of inflation and geopolitical risks pulled the world gold price to a one-week high in session 7/2.

At the end of the first session of the week, each ounce of world gold for immediate delivery increased by nearly 12 USD to 1,820 USD. During the session, the price at one point rose to $ 1,824 – the highest since January 27.

Gold prices rose as inflation concerns and geopolitical risks persisted as the market waited for US inflation data to predict a move to raise interest rates by the US Federal Reserve (Fed).

The world gold price yesterday reached the highest level in a week.

The world gold price yesterday reached the highest level in a week.

"There is buying in shelter in the market. The biggest concern right now is where inflation will go and how strong the Fed will be," said Bob Haberkorn, senior market strategist at RJO Futures.

Yields on 10-year US government bonds are now near their highest since December 2019, helped by upbeat jobs data late last week. This Thursday, the US will publish the January inflation report. The market now thinks that the Fed is likely to raise interest rates by 0.5% in March.

While gold is seen as a hedge against high inflation and a store of value in times of volatility, high interest rates make the precious metal less attractive.

Besides, Haberkorn believes that the Russia-Ukraine tension also makes many people look to gold. White House security adviser Jake Sullivan said last weekend that Russia could send troops into Ukraine within the next few days or weeks. However, Russia could also choose to settle it diplomatically.

Gold and silver prices were also supported yesterday when the Dolla Index fell sharply from its late-January peak, added Jim Wyckoff, an analyst at Kitco Metals.