Gold prices rose on Wednesday, supported by a decline in the dollar and US bond yields, as investors expect a slowdown in the pace of interest rate hikes from the US Federal Reserve at its monetary policy meeting next week.
Sharjah 24 – Archyde.com:
Gold prices rose, on Wednesday, in spot transactions, by 0.7%, to $ 1783.98 an ounce, by 14:35 GMT.
US gold futures rose 0.5% to $1,790.60.
Bart Melek, Head of Commodity Markets Strategy at TD Bank, said: Securities “We’re seeing rates falling along the curve here, there’s a slight pullback in the US dollar, we’re just going up from the lows.”
The dollar fell 0.4% once morest its rivals, making bullion less expensive for buyers abroad.
And the US Treasury’s benchmark yields for 10 years fell to the lowest level in 3 months.
Market participants widely expect the Federal Reserve to increase interest rates by 50 basis points at its last meeting of 2022, scheduled for December 13-14.
Increasing interest rates aimed at combating inflation is often intended to increase the opportunity cost of holding interest-free gold.
Also awaited is CPI data for November in the US which is due to be published next week.
However, uncertainty surrounds the future of bullion due to strong US economic data recently, which led to fears that the Federal Reserve may increase interest rates more than was expected recently.
“There is some suspicion now that traders may have been too quick to conclude that the US central bank is going to cut interest rates, and we are now in a bit of a wait-and-see pattern ahead of the FOMC meeting next Wednesday,” Melek said.
As for other precious metals, spot silver rose 2.1% to $22.62 an ounce.
“Silver is certainly vulnerable to an economic slowdown due to its industrial appeal, but it may be spared the worst of any downturn given its importance to the energy transition,” Robert Rowling, financial analyst at Kenesy Money, said in a note.
Platinum rose 2.3% to $1011.65 an ounce, and palladium rose 0.7% to $1862.25.
