This week gold started slightly higher on Monday after last week’s losses, pushed up by a falling dollar, reaching a one-week high. The incline continued through to Tuesday after China showed slower economic growth, including slower-than-expected growth in factory output and retail sales. Weaker markets in Asia boosted safe haven demand for the yellow metal, to around $1,280 per ounce. Some profit-taking tempered a further rise in gold prices.
Wednesday, however, the price of gold slipped nearly $10 down to around $1,270 per ounce, ahead of the latest release of FOMC minutes. Stronger economic data has led two Federal Reserve spokespeople to indicate that two interest rate hikes could be in store this year. The Consumer Price Index showed its biggest increase in three years in April, gaining 0.4%. Petrol prices and rent also saw increases, while new housing and industrial production showed growth. The next Fed meeting is in June.
Gold fell 2% on Thursday after Fed minutes indicated interest rates are set to rise in June. The dollar was also trading higher. Gold fell to below $1,250 per ounce, hitting a three-week low, while the dollar was at a 7-week high. U.S. jobless claims were also reported to have declined. If data shows stronger second-quarter growth, along with solidifying inflation and employment, the Fed may be on track to raise rates. Friday saw some rebound in gold prices due to stronger trading in Asia.