Spot gold rises 0.2% as dollar index heads for second straight weekly decline
27 May 2022 - 08:11
byBharat Gautam
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Bengaluru — Gold prices firmed on Friday as the dollar continued to weaken, and helped put bullion on track for a second straight weekly rise amid cooling bets for a more aggressive Federal Reserve monetary policy.
Spot gold was up 0.2% at $1,854.05/oz by 3.25am GMT. US gold futures were up 0.2% at $1,851.90. For the week so far, bullion is up 0.4%.
Gold this week has been supported by a moderation somewhat in market expectations from the Fed’s monetary policy for next year, and most importantly the weaker US dollar, said Ilya Spivak, a currency strategist at DailyFX. There is price support at $1,830 on the downside and on the topside the next key level is around $1,885, Spivak added.
Minutes of the Fed’s May 3-4 policy meeting released on Wednesday highlighted, as the market expected, that most participants favouring additional 50 basis point rate hikes at the June and July meetings. Higher short-term US interest rates and bond yields raise the opportunity cost of holding bullion, which yields nothing.
The dollar index fell en route a second straight weekly decline, making bullion less expensive for buyers holding other currencies. “We need a clearer signal that hard economic data is turning sour for the Fed to even think about a pause [in tightening] ... hence gold investors are still reluctant to push the envelope significantly higher,” said Stephen Innes, managing partner at SPI Asset Management. “If the Fed signals a pause, then gold will move much higher, but until they do so, we could be range trading for a bit.”
Spot silver dipped 0.2% to $21.95/oz, and has gained about 1.5% so far this week. Platinum was nearly flat at $950.28. Palladium gained 0.1% to $2,015.96 and was set for a weekly gain of about 3%, its most since early April.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Gold heads for weekly gain as dollar weakens
Spot gold rises 0.2% as dollar index heads for second straight weekly decline
Bengaluru — Gold prices firmed on Friday as the dollar continued to weaken, and helped put bullion on track for a second straight weekly rise amid cooling bets for a more aggressive Federal Reserve monetary policy.
Spot gold was up 0.2% at $1,854.05/oz by 3.25am GMT. US gold futures were up 0.2% at $1,851.90. For the week so far, bullion is up 0.4%.
Gold this week has been supported by a moderation somewhat in market expectations from the Fed’s monetary policy for next year, and most importantly the weaker US dollar, said Ilya Spivak, a currency strategist at DailyFX. There is price support at $1,830 on the downside and on the topside the next key level is around $1,885, Spivak added.
Minutes of the Fed’s May 3-4 policy meeting released on Wednesday highlighted, as the market expected, that most participants favouring additional 50 basis point rate hikes at the June and July meetings. Higher short-term US interest rates and bond yields raise the opportunity cost of holding bullion, which yields nothing.
The dollar index fell en route a second straight weekly decline, making bullion less expensive for buyers holding other currencies. “We need a clearer signal that hard economic data is turning sour for the Fed to even think about a pause [in tightening] ... hence gold investors are still reluctant to push the envelope significantly higher,” said Stephen Innes, managing partner at SPI Asset Management. “If the Fed signals a pause, then gold will move much higher, but until they do so, we could be range trading for a bit.”
Spot silver dipped 0.2% to $21.95/oz, and has gained about 1.5% so far this week. Platinum was nearly flat at $950.28. Palladium gained 0.1% to $2,015.96 and was set for a weekly gain of about 3%, its most since early April.
Reuters
Gold inches up to more than one-week high as dollar slides
Steady dollar and firmer bond yields keep the lid on gold prices
Gold slips, dollar strengthens as Fed boosts interest rates
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