Gold on track for biggest weekly profit since February

Gold prices rose in European trade for the third straight session, hitting three-week highs and on track for the largest weekly profit since February as the dollar kept falling following Fed's latest policy meeting.

Gold was also boosted by US data showing the economy went in true recession in the first half of the year.

Prices Today

Gold prices rose 0.7% today to $1,767 an ounce, the highest since July 6, after rising 1.2% yesterday, the second profit in a row.

Gold is up 2.4% so far this week, on track for the second weekly profit in a row, and the largest since late February.

The dollar 

The dollar index fell 0.6% on Friday, marking three-week lows at 105.54 against major rivals. 

The Federal Reserve

The Federal Reserve decided yesterday to hike rates by 75 basis points to 2.5%, the highest since December 2018 as expected.

Fed Chair Jerome Powell said the bank might slow down the pace of interest rate hikes, leading to a tumble in dollar and treasury yields.

He also said another big hike at the next meeting wouldn't be appropriate, but the decision will depend on economic data.

Recession

US economy shrank by 0.9% in the second quarter of 2022, the second such contraction in a row, while analysts expected a growth rate of 0.4%, after shrinking 1.6% in the first quarter.

Estimates 

Analysts bet that gold prices will keep heading above $1,770, potentially hitting $1,800.

The SPDR 

Gold holdings at the SPDR Gold Trust remained flat yesterday at 1,005 tones, the lowest since January 20.