Gold prices rose in trading on Wednesday, amid expectations that the US Federal Reserve’s move to raise interest rates will be soon.
The rally in the yellow metal’s prices came despite the dollar’s rally, which limited gains for gold that is hovering near the key $1800 level.
Gold prices fell by more than $22, at the close of trading on Tuesday, to its lowest level in 3 weeks, with the rise in US bond yields.
Gold Prices Today
The price of gold futures contracts for February delivery increased by 0.65%, to reach the level of $ 1797.90 an ounce.
The spot price for the yellow metal also increased by 0.21%, recording $1,792.95 an ounce.
At the same time, the price of silver futures contracts – March delivery – rose by 0.82%, to $23.69 an ounce.
The spot platinum price also rose by 1.1%, recording $981.34 an ounce, and the spot palladium price rose by 1.53%, reaching $1903.87 an ounce.
It comes as the dollar index settled near 16-month highs, raising the cost of bullion for buyers holding other currencies.
Gold prices fell about 4.5% from their highest level in 5 months last week, on expectations that Federal Reserve Chairman Jerome Powell may accelerate the pace of the US central bank’s normalization of monetary policy amid rising consumer prices.
Bets helped boost the dollar index, which held near a 16-month high on Wednesday, adding to pressure on bullion, as it raises the metal’s cost to holders of other currencies.
Investors are betting that new Federal Reserve Chairman Jerome Powell will need to accelerate the pace of the bank’s normalization of monetary policy to better deal with rising consumer prices.
British businesses reported the fastest growth in new orders since June this month, along with record cost pressures, according to a closely watched business survey, which could pave the way for a Bank of England interest rate hike in December, it said. Reuters.
An increase in interest rates reduces the attractiveness of bullion, as higher rates increase the opportunity cost of the non-interest bearing metal.
US business activity slowed moderately in November, amid labor shortages and raw material delays, which contributed to persistently higher prices in the middle of the fourth quarter.
Gold Market Forecast
“Although most of the quick money long positions in the past week have now closed, gold is unlikely to see a meaningful recovery above $1800, unless the 30-year US yields dip below $1,800,” said Jeffrey Haley, chief market analyst , gains this week.
US 30-year Treasury yields were not far from their highest level since late October hit earlier this month.
Investors’ focus shifted to a flood of US data, including the pivotal PCE price index, quarterly GDP, and the minutes of the Federal Reserve’s latest meeting due later in the day.
The head of commodity research at Geojit Financial Services, Harish V in Kochi, said that although recent US data, including retail sales, were positive, the uncertainty about the recovery in jobs could prevent the Federal Reserve from accelerating its record over the next few months. , which supports gold prices.
On the other hand, the World Platinum Investment Council expects a much larger surplus in the global platinum market this year than it previously forecast and another large oversupply in 2022.
SOURCE : BLOOMBERG