International Gold Prices Surge on US Dollar Weakness
International gold prices witnessed a significant surge on Tuesday, February 28, as the US dollar weakened amid market volatility and geopolitical concerns. The precious metal, often considered a safe haven asset, benefited from the decline in the greenback, which makes it more attractive for investors holding other currencies.
According to FXStreet, the spot gold price rose by 0.9% to $1,928.22 per troy ounce during the Asian trading session. This upward momentum continued in European markets, with gold prices hitting a high of $1,932.54 per troy ounce before slightly retreating.
The US dollar index, which measures the value of the US dollar against a basket of six major currencies, fell by 0.2% to 104.68. This decline was attributed to a combination of factors, including concerns about the potential impact of the ongoing Russia-Ukraine conflict on the global economy and expectations of a less hawkish stance by the Federal Reserve in the coming months.
Analysts noted that geopolitical tensions have also played a role in supporting gold prices. The conflict in Ukraine has sparked fears of a wider war in Europe and raised concerns about its impact on energy supplies. Gold is often seen as a hedge against uncertainty and risk during times of crisis.
In addition, the market is awaiting the release of key economic data later this week, including the US monthly employment report and the European Central Bank’s interest rate decision. These events could further influence the direction of the US dollar and, consequently, gold prices.
Overall, the combination of US dollar weakness and geopolitical concerns has created a favorable environment for gold prices, which are expected to remain supported in the short term. Investors continue to seek safe haven assets in the face of uncertainty, and gold is likely to benefit from this demand.
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