The gold price has racked up its 2nd straight day of gains today on the back of US dollar weakness and doubts over an interest rate hike next month from the US Federal Reserve.
At 4.48pm (GMT) gold was trading at $1,240 up from $1,231 in yesterday’s trading.
Federal Reserve Chair Janet Yellen is currently giving her testimony to the U.S. Congress this week, with analysts expecting a hawkish tone with regards to rate rises.
Some still don’t see a rate rise next month as a done deal, which may be supporting gold at the moment.
The question now is how much longer can the rally last?
The gold price has also broken with tradition recently by rising alongside the US dollar and S&P 500, which is a particularly rare occurrence as they usually move in opposite directions. Jiang Shu, chief analyst at Shandong Gold Group said,
Gold is approaching a turning point and the upward trend in prices could end in the near future. Perhaps the market is currently underestimating the prospects of an interest rate hike by the US Federal Reserve in March, given the strong economic data. The impact on gold prices would probably show in the medium term.