Weak US dollar prompts gold to rise to almost $1,200 per troy ounce

Gold rates rose overnight to nearly $1,200 per troy ounce due to weak US dollar. In euro terms, the yellow precious metal is failing to profit because of the depreciating US currency and actually fell for a time to a good €1,040 per troy ounce. The US Federal Reserve did not raise interest rates yesterday, as anticipated by Commerzbank. 

Nonetheless, in the subsequent press conference Fed president Yellen dampened rate hike speculations, putting US Dollar under pressure. She explained that the market should not expect the Fed to raise interest rates in every meeting or every other meeting. The decision about interest rate rises remains data dependent. 

"The cycle of rate hikes to begin in September. Until then, the gold price is unlikely to make any significant gains because of the uncertainty surrounding this question. The currently weak investment demand and subdued physical demand are likely to prevent gold rising lastingly above the $1,200 per troy ounce mark again", said Commerzbank in a report to its clients on Thursday.

Eurozone finance ministers will be meeting today in a bid to find a solution to the Greek debt problems before it is too late. Lengthy negotiations are expected. Time is running out as the current aid programme for Greece runs out at the end of the month. Without further financial aid, there is a real risk of national bankruptcy, at the same time the highly-indebted country is also due to IMF.