Gold prices fell on Friday, as traders were caught between concerns about widening inflation risks and the prospect of faster interest rate hikes, reducing the attractiveness of bullion as a way to hedge against inflation.
Gold prices had closed their previous session with a decline, to fall from the highest level in 5 months, while anticipating the movements of central banks, to limit the rise in the inflation rate.
Gold prices today
The price of gold futures – February delivery – decreased by 0.31%, to record the level of $ 1858.30 an ounce
The price of spot delivery for the yellow metal also decreased, by 0.31%, to record $1853.11 an ounce.
At the same time, the price of silver futures contracts – for December delivery – decreased by 0.45%, to $24.85 an ounce.
The spot platinum price also decreased by 0.01%, recording $ 1051.27 an ounce, while the spot palladium price rose by 0.06%, to reach $2136.66 an ounce.
Gold prices rose to their highest level in more than 5 months earlier this week, as the acceleration in US consumer prices last month heightened fears that inflation could remain uncomfortably high into 2022.
“While high inflation has lured strong buying interest in gold, expectations of policy normalization by the US Federal Reserve and other major central banks amid a sharp recovery in growth remain a major headwind for the metal,” said Suganda Sachdeva, Vice President of Commodities and Currency at Religaar Brookings. “.
She added, “Gold prices are likely to consolidate in a range between $1835 and $1880 in the short term, but in the long term the yellow metal is likely to see buying interest at lower levels, and if prices exceed $1880 it could rise to $1,920.”
Fed policymakers are turning to the prospect of raising interest rates sooner than they thought would be needed just a few months ago.
Higher interest rates increase the opportunity cost of gold, which carries no interest, reducing the attractiveness of the metal.
“The focus on interest rate hikes and their impact on inflation makes near-term gold price action highly sensitive to economic data such as PCE next week,” said Ilya Spivak, currency strategist at DailyForex.
Market participants also evaluated data showing Swiss gold exports to China increased in October, while shipments to India declined slightly from September.