Gold prices rose in the European market on Tuesday for the first time in three days, getting close to a 14-month high as demand for the precious metal rallied again as a safe haven ahead of the Federal Reserve meeting, which is expected to provide clear evidence of prospects on a US interest rates cut this year.
As of 11:15 GMT, gold prices rose by 0.6% to trade at $1,347.27 per ounce from the opening level of $1,339.78, and recorded a high of $1,348.20 and a low of $1,338.64.
Yesterday, gold prices lost 0.2%, the second consecutive daily loss, on correction and profit taking from a 14-month high of $1,358.14 per ounce.
Gold prices have gained more than 3% since the start of trading this month, thanks to strong investment demand for the precious metal as a safe haven, as well as the possibility of the US Federal Reserve to cut interest rates in the next few months.
The monetary policy meeting of the Federal Reserve will begin later today, with the release of its decisions on Wednesday, amid string prospects for US interest rates to remain unchanged at 2.50% this month.
Investors are focusing on monetary policy data and economic forecasts, as well as comments by Federal Reserve Chairman Jerome Powell, on the lookout for new evidence of US interest rate cuts this year.
These prospects have increased recently due to the high risk surrounding the US economy, which began to be felt during the second quarter of this year. These risks are the upsurge in US trade wars with several countries, led by China, in addition to the weakening of inflation levels in the country.
Gold holdings at the SPDR Gold Trust Fund (The largest gold-backed global index funds) remained unchanged yesterday, with the total trading at 764.1 metric tons, the highest since April 3.