Gold rose 2% on the weakening of the dollar

The cost of gold on Wednesday rose by more than 2%, which contributed to the decline in the dollar. In the evening the precious metal was traded on the Comex exchange at $1670.55 per troy ounce, having added 2.10%.

The dollar index, which is currently at its highest levels in 20 years, by the end of the day lost more than 1.3% after the Bank of England announced short-term plans to buy government bonds to calm financial markets. The impact of this information on the market was noted by Swissquote Bank analyst Ipek Ozkardeskaya, who told the French-Presse that the comment helped cool the jumping dollar.

The low rate of the latter is beneficial to gold buyers, as it gives them an opportunity to buy it in larger quantities; in this regard, the weakening of the U.S. currency is traditionally accompanied by increased demand for the precious metal. Gold was also supported by the decline in the yield on ten-year U.S. government bonds, which in the evening fell by 6.5% to 3.707%.