Gold little changed as Fed comments lift dollar
The metal is steady on Wednesday after the Federal Reserve reaffirms the need for a further increase in interest rates
Bengaluru — Gold prices were tepid on Wednesday pressured by a robust dollar after a senior US Federal Reserve official reaffirmed the need for a further increase in interest rates, making bullion more expensive for holders of other currencies. Fed vice-chair Richard Clarida said on Tuesday the central bank should continue to gradually raise interest rates, but it was “especially important” to monitor economic data as monetary policy was getting close to a neutral stance. “The strength of the US dollar has been bad for gold, while the Fed is little more bullish about interest rates,” said John Sharma, an economist with National Australia Bank (NAB). Prospects of higher US interest rates are negative for dollar-priced gold as they raise the opportunity cost of holding the bullion. Investor attention is now turned towards Fed chair Jerome Powell’s speech later on Wednesday and the minutes from the Fed’s November 7-8 meeting on Thursday, as they look for indications on US rates hikes i...
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