Gold prices climb with eyes fixed on central bank meetings

Gold prices rose in European trade after a two-day hiatus from gains on profit-taking off nine-month highs, with prices holding above $1,900 while dollar declines. 

Now investors await meetings by central banks in Europe, the UK, and the US, all are expected to hike interest rates to control inflation.

Gold Prices Today

Gold prices rose over 0.3% to $1,934 an ounce, after losing 0.1% on Friday, the second loss in a row on profit-taking off nine-month highs at $1,949. 

The precious metal rose 0.1% last week, the sixth weekly profit in a row, and the longest such streak of weekly gains since June 2020 as dollar declined.

The Dollar

The dollar index fell 0.15% on Monday, resuming the losses and almost hitting recent eight-month lows at 101.50 against a basket of major rivals. 

Dollar's decline makes dollar-denominated commodities cheaper to holders of other currencies. 

Global Central Banks

The Federal Reserve is convening this week to decide on policies, expected to issue a reduced rate hike of 0.25% this time around. 

Central banks in Europe and the UK are also expected to increase interest rates but by 0.5% this week and extend their policy tightening efforts. 

Actual Demand

Chinese government noted that the current wave of Covid 19 infections in China is getting to an end if no major outbreaks occurred during the lunar near year holiday. 

Thus it's expected for actual demand on gold to improve as Chinese economy opens up once more. 

The SPDR

Gold holdings at the SPDR Gold Trust fell 0.87 tones on Friday to a total of 918.50 tones. 

Will gold prices pierce $2000 this week?

Many analysts expect gold prices to extend gains and pierce $2000 for the first time since March 2022 if the Fed issued strong evidence on ending the cycle of policy tightening and rate hikes.