The gold spot price spiked $17.80 per ounce Friday morning due to an unexpected decline in the U.S. Dollar Index, as well as due to buying caused by the change of wording during a recent Federal Open Market Committee (FOMC) meeting. As of 11:00am EST the gold spot price was hovering around in the $1,185-$1,190 per ounce range.
The FOMC has been consistent in its use of the word “patient” in reference to raising interest rates, currently at 0.25% at the primary level. The minutes from this week’s meeting, however, didn’t include the word “patient,” causing many investors to buy gold as a precautionary measure. Historically, a rising interest rate cycle coincides with rising gold prices.
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Additionally, the U.S. Dollar Index has been rising steadily for several months. Today’s sudden fall could indicate a changing trend, according to Certified Gold Exchange analysts. “If the trend of the last few months is changing,” said CGE analyst Rob Patel, “today’s 1% increase of the gold price could be the beginning of a new rising gold price cycle.”
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