The price of gold has reached its highest level in two weeks as fears of higher interest rates in the U.S. begin to subside.
Gold hit a high of close to $4,200 U.S. on July 6 ahead of the minutes from the U.S. Federal Reserve’s June meeting being released.
The price of the precious metal has bounced higher to start July as Wall Street begins to reevaluate its expectations for interest rate increases in this year’s second half.
Higher interest rates are typically bad news for non-yielding assets such as gold. However, the outlook for rate increases has begun to moderate.
Currently, traders place a 53% chance that the U.S. central bank will raise interest rates at its September meeting, down from 60% a week ago.
Rapidly falling crude oil prices are likely to lower inflation in the U.S. in coming months, taking pressure off the Federal Reserve to raise interest rates.
A weaker-than-expected U.S. jobs report last week has also led markets to dial back their rate hike expectations.
Despite the July bounce, gold remains down 25% from the record high of $5,602.22 U.S. per ounce that it reached in January of this year.
