Gold prices rose again in the international market on Wednesday (September 16), supported by a weaker US dollar, stability in oil prices and a decline in US bond yields. However, investors are now closely watching the US Federal Reserve’s decision on interest rates.

According to a Reuters report, spot gold rose 0.7 percent on Wednesday to $4,324.36 per ounce. Gold prices had fallen to their lowest level in more than a month on Monday (September 14). US gold futures for December delivery also gained 0.8 percent to $4,365 per ounce.

Nikos Tzavoras, senior market analyst at Jefferies-owned Tradur, said gold prices increased due to the weakening dollar, some stability in oil prices and lower US bond yields.

However, he believes the short-term trend for gold prices remains downward. According to him, the Federal Reserve’s interest-rate decision will play an important role in determining the metal’s next direction.

Gold is generally considered a hedge against inflation. However, when interest rates rise, the opportunity cost of holding gold—which pays no interest or income—increases. As a result, higher interest rates generally put pressure on gold prices.

Tzavoras said elevated crude oil and consumer prices caused by supply disruptions could create pressure for tighter monetary policy. This could put further pressure on gold prices.

Meanwhile, growing US budget deficits are weakening confidence in the dollar. As a result, investors are increasingly turning to tangible assets such as gold.

Several other central banks are also set to announce interest-rate decisions this week. On Friday, the Bank of Japan may raise interest rates to their highest level in 31 years. It may also signal that borrowing costs could rise further in the future.

Geopolitical tensions also affecting gold
Geopolitical tensions are also influencing the gold market. A spokesperson for the Saudi-led military coalition said Saudi Arabia’s air defence system had destroyed a Houthi drone south of Makkah. The drone was destroyed before it entered the restricted airspace of the holy city.

Prices of other metals
Among other precious metals, silver rose 1 percent to $64.30 per ounce. Platinum fell 0.2 percent to $1,771.65 per ounce, while palladium gained 1.2 percent to $1,304.94 per ounce.
Source: Reuters

Gold prices in Bangladesh
Meanwhile, in Bangladesh, the current price of the highest-quality 22-carat gold jewellery, including VAT, is Tk 232,930 per bhori (11.664 grams).

The price of 21-carat gold is Tk 222,491 per bhori, while 18-carat gold is priced at Tk 191,056 per bhori.