Gold rises for second straight day on investors' risk aversion

Gold prices rose on Thursday, extending gains for a second straight day, as worries about global trade wars and geopolitical tensions in the Gulf region pushed investors' risk aversion, as well as strong prospects for the Federal Reserve to cut interest rates in the next few months.

As of 10:57 GMT, Gold prices rose by 0.2% to trade at $1,336.45 per ounce from the opening of $1,333.97 and recorded the highest level at $1,339.03 and the lowest at $1,332.38.

Gold prices gained 0.5% yesterday, the first gain in three days, after US stocks fell on Wall Street, on the support from weak data on the pace of inflation in the United States during May.

Most global equity markets tumbled on Thursday as investors avoided risk on worries about global trade wars, as well as rising geopolitical tensions in the Gulf region.

World trade wars are still the main focus of investors, as negotiations between the United States and China to resolve the tariffs disputes and to reach a comprehensive trade deal have been difficult and US President Donald Trump has threatened to impose sanctions on a pipeline under construction that supplies northern Europe with natural gas from Russia.

In the Persian Gulf region, two oil tankers were attacked by a sabotage attack near the coast of Iran, increasing geopolitical tensions there. as Saudi Arabia accuses Iran of being behind the attacks, especially with the Houthi group carrying out sabotage actions inside Saudi territory.

The dollar index fell 0.1% on Thursday, resuming losses that were suspended yesterday, reflecting the decline of the US dollar again against a basket of major and secondary currencies.

As the US dollar remains under pressure from the increasing possibility of the Federal Reserve cutting interest rates in the next few months, in addition weak economic data that indicates a sharp decline in the growth of the world's largest economy, and also in response to pressure from Donald Trump's administration desire of low interest rates in the country.

Gold holdings at the SPDR Gold Trust (The world's largest gold-backed index) rose yesterday by 3.52 metric tons, bringing the total to 759.7 metric tons, the highest since April 8.