Gold prices edge higher as dollar slips
Gold prices moved higher as the dollar dropped to one-and-a-half month lows against the yen amid speculation that the Bank of Japan could move to scale back its massive stimulus program later this year. The dollar extended losses against the yen into a second session, falling to the lowest levels since December 1 after the Bank of Japan tweaked the size of its bond purchases on Tuesday, reminding investors that it will eventually normalize monetary policy. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, edged down to 92.15 from Tuesday’s one-week high of 92.36.Demand for the dollar continued to be underpinned by expectations for further interest rates hikes by the Federal Reserve this year after Friday’s U.S. jobs report did little to alter the outlook for monetary tightening. Gold is highly sensitive to rising U.S. interest rates, as they increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
Source : Investing
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