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Gold prices dip after US Fed chief pledges to keep up inflation fight

Spot gold fell 0.2% to $1,834.33 per ounce by 0733 GMT. U.S. gold futures eased 0.1% to $1,835.60

Topics
Gold Prices | US Federal Reserve | US Inflation

Reuters 

Photo: Andrey Rudakov/Bloomberg
Photo: Bloomberg

eased on Thursday, pressured by expectations of aggressive interest rate increases after the U.S. Federal Reserve chief doubled down on the central bank's fight against inflation.

Spot gold fell 0.2% to $1,834.33 per ounce by 0733 GMT. U.S. gold futures eased 0.1% to $1,835.60.

"With (Fed Chair Jerome) Powell pointing out overnight that 1% rises were a real possibility, it's a reminder of that constant pressure on from rising interest rates," said Michael McCarthy, chief strategy officer at Tiger Brokers, Australia.

When asked by a member of the Senate Banking Committee if the Fed could raise rates by as much as 100 basis points at once, Powell said he would never take anything off the table, and officials would make whatever moves were needed to restore price stability.

Gold is often viewed as a hedge against inflation and a safe haven during economic crises, like recession, but saw some gains after Powell's statement as Treasury yields bore the brunt of it. [US/]

Higher interest rates and bond yields raise the opportunity cost of holding bullion, which yields no interest.

Powell is due to testify again in Washington D.C. later on Thursday.

"Gold is expected to follow the commodity complex down. It is more likely for gold to trade below $1,800/oz in the next two weeks than not," said Michael Langford, director at corporate advisory AirGuide.

"Gold is crypto for Boomers, it has no meaningful industrial usage and is a psychological store of value much in the same way crypto was for the younger generation."

The dollar firmed at elevated levels after some losses in the previous session, hurting demand for greenback-priced bullion among buyers holding other currencies. [USD/]

Spot silver dropped 0.5% to $21.28 per ounce, platinum fell 0.2% to $924.22, and palladium rose 0.6% to $1,874.23.

 

 

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Thu, June 23 2022. 16:18 IST
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