Gold hits four-week high as dollar declines

Gold prices rose in European trade for the fourth straight session, hitting four-week highs as the dollar index fell against major rivals following the Fed's more bearish meeting. 

Gold was boosted by strong haven demand as the US economy fell in recession in the second quarter of the year. 

Gold prices rose 0.55% to $1,774.91 an ounce, the highest since July 5, after rising 0.6% on Friday, the third profit in a row. 

Gold rose 2.3% last week, the second weekly profit in a row, and the largest since late February. 

The Dollar

The dollar index fell 0.5% on Monday for the fourth session, plumbing three-week lows at 105.31 against major rivals. 

The decline came after the latest Fed's meeting, with chair Jerome Powell sounding bearish remarks and refusing to present future official forecasts.

Latest US data showed US economy contracted in the second quarter of the year by 0.9%, adding to a 1.6% contraction in the first quarter.

Estimates

Now analysts expect gold to benefit from the latest surge in haven demand as economies struggle to achieve proper growth under high interest rate and inflation conditions. 

The SPDR 

Gold holdings at the SPDR Gold Trust rose 0.58 tones on Friday to a total of 1,005 tones.