Gold is heading for the best weekly gain in two months

Gold is up 1.4% since the beginning of last week.

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Yesterday, gold headed for its best weekly performance in more than two months, on renewed indications that the US Federal Reserve may be reluctant to reduce economic support in the short term, and at a time when the dollar headed towards its worst weekly performance since May.

And gold settled in spot transactions at $1,827.41 an ounce, after hitting its highest level since July 15, at $1,832.4, the day before yesterday.

Gold has risen 1.4% since the beginning of last week.

US gold futures fell 0.3% to $1,830.80 an ounce.

“The background for gold is still positive, there is a lot of uncertainty about whether the economic recovery will remain strong, and what is happening in the US labor market,” said Harshall Parrott, senior research advisor for South Asia at Metals Focus.

"There is no clear indication that the Federal Reserve should raise interest rates aggressively," he added.

Low interest rates reduce the opportunity cost of holding the yellow metal, which does not generate returns.

And gold jumped 1.4% the day before yesterday, after the statements of the Federal Reserve Chairman, Jerome Powell, that there is still “some room for recovery” in the US labor market, and that thinking about raising interest rates is “a long way away.”

His view was supported by data showing that the US economy expanded strongly in the second quarter, but growth came in below expectations.

In the meantime, the dollar index attempted to rise from its lowest level in a month, yesterday, while heading towards recording its worst weekly performance since May.

As for other precious metals, silver settled at $25.51 an ounce, and headed towards achieving its first weekly gain in four weeks.

Palladium rose 0.2% to $2,652.42 an ounce, while platinum fell 0.5% to $1,055.38.

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