Gold price now hits its three-week high this Tuesday. The gold for August delivery was increased 1% to $1,365.20 per troy ounce on the the New York Mercantile Exchange which is the highest price since July 11.
Gold has surged this year on rising demand for safe investment assets after the Brexit vote and Federal Reserve remain interest rate unchanged for several months. According to the Perth Mint, an Australian refiner, a victory for Donald Trump in the U.S. presidential election in November would provide a further catalyst to prices.
“There is a feeling that the Fed can’t do much, even if they want to, and that’s pushing people into gold,” said Ira Epstein, a strategist at the Linn Group. Bets on federal-funds futures, a popular vehicle for traders to express views on the central bank’s policy outlook, showed that investors assigned a 15% likelihood of the Fed raising rates by September, down from 18% a day earlier.
According to Doray Minerals Ltd. Managing Director Allan Kelly, “This is possible depending on what happens around the world and depending on what happens with the U.S. elections. There’s still room to move.”
In addition, Australia’s central bank decreased interest rates on Tuesday, responding to record-low inflation and a slowing jobs market, while playing down the risks of fanning house-price growth. Many investors expect the Bank of England to ease monetary policy when it meets Thursday, in a bid to quell the aftershocks of the Brexit vote.
“The Fed seemingly is in hold mode, which is positive for gold, but every once in a while they let slip that September is still a possibility for a rate rise,” said David Govett, head of precious metals at brokerage Marex Spectron in London.
The next clue on the timing of an increase will come on Friday, when the U.S. Labor Department releases employment figures for July.