Gold shines with the decline of the dollar amid market turmoil from OPEC’s decision
Gold prices rose 1 percent on Monday, after the decline in the dollar increased the attractiveness of the yellow metal as a safe haven, after the sudden production cuts announced by the OPEC + group raised fears of continuing inflation for a long time, as well as a state of uncertainty about the way central banks respond.
Spot gold prices rose 0.9 percent to $1984.75 an ounce by 1745 GMT. And US gold futures rose 0.7 percent, to settle at $ 2,000.40.
“We are constantly bombarded with major events and this keeps investors nervous,” said Edward Moya, senior market analyst at OANDA, referring to the global banking turmoil that pushed gold up 8 percent last month.
Moya added that the sudden OPEC+ decision “is really driving trade in gold in order to hedge against inflation.”
Gold is a traditional hedge against inflation, but higher interest rates aimed at curbing pressure from increasing prices reduce the attractiveness of the non-interest-bearing yellow metal. The sudden OPEC cut also sent a sharp drop in the dollar, in which gold is priced.
Also adding to the appeal of gold, manufacturing activity in the United States fell to its lowest level in nearly three years in March, and a tightening of credit conditions, which led to continued losses in the benchmark 10-year Treasury yield.
Earlier in the session, gold touched a four-week low of $1,949.55.
Among other precious metals, silver fell 0.7 percent to $23.91 an ounce, platinum fell 0.5 percent to $986.07, and palladium settled roughly at $1460.52.
