Gold prices on Tuesday rose to their highest in more than three months as a weaker US dollar and growing inflationary pressure lifted bullion’s appeal as an inflation hedge.
Analysts are of the view that high liquidity may push the yellow metal prices near $1,900/oz in the coming weeks.
“The prime driver for gold prices is the fear of inflation and that inflation is now starting to built-up inside the US. We have seen for now, probably over 12 months, a stimulatory programme going on inside the US where funds are flowing directly through the mums and dads in the US,” David Lennox of Fat Prophets told CNBC-TV18.
According to him, an increase in the money supply in the US will further push inflation higher, ultimately rising gold prices.
“We have seen experts suggesting that the inflationary round is not yet over, and that does mean that the strong reading that we saw from inflationary numbers a couple of days ago is going to continue and that’s the fear that we see driving the gold prices up and over towards USD 1,900 per ounce in the next couple of weeks,” he added.
For the entire interview, watch the video