2018.07.2506:45:00UTC+00Gold Edges Up On Dollar Weakness

Gold prices edged higher on Wednesday as the dollar slipped ahead of a key meeting between U.S. President Donald Trump and European Commission President Jean-Claude Juncker on trade.

Spot gold was up half a percent at $1,230 an ounce while U.S. gold futures gained 0.4 percent to $1,230.30.

The International Monetary Fund, in its annual External Sector Report, said on Tuesday that the U.S. dollar was over-valued because current account surpluses and deficits were becoming increasingly concentrated in advanced economies.

A sliding U.S. currency makes dollar-denominated gold cheaper for holders of other currencies. At the same time, rising bond yields and expectations of higher interest rates lift the opportunity cost of gold, as it pays no interest. With inflation poised to breach its 2 percent inflation target, the Federal Reserve is expected to raise interest rates gradually despite criticism from U.S. President Donald Trump.