Gold heads for weekly rise on hopes Fed will curb hikes
Prices hold steady on hopes of slower US interest rate increases
20 January 2023 - 07:42
byAshitha Shivaprasad
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Bengaluru — Gold prices held steady on Friday but were on track for a fifth consecutive weekly gain, as a weaker dollar and hopes of slower US interest rate hikes boosted the safe-haven bullion’s appeal.
Spot gold was little changed at $1,930.04/oz at 3.08am GMT and was up 0.5% for the week. On Thursday, prices hit $1,935.20, the highest since April 2022.
US gold futures rose 0.4% to $1,931.50/oz.
The US Federal Reserve will end its tightening cycle after a 25-basis-point hike at each of its next two policy meetings and then likely hold interest rates steady for at least the rest of the year, according to a Reuters poll.
“It is possible for gold to hit $2,000 this year, but for that we need to see a down shift in hawkish tone from the Fed to confirm current market rate hike expectations,” said IG Market strategist Yeap Jun Rong.
Boston Fed president Susan Collins said on Thursday that the Fed would probably need to raise rates to “just above” 5%, while Fed vice-chair Lael Brainard said there was evidence in favour of a “soft landing” for the US economy.
With lower rates translating into lesser returns on interest-bearing assets such as government bonds, investors may prefer zero-yield gold.
“There are signals that show that the US is probably heading to a recession, this will favour gold as it is historically supportive for gold,” said Brian Lan, MD at Singapore-based dealer GoldSilver Central.
Data on Wednesday showed US retail sales dropped by the most in a year, putting the overall economy on a weaker growth path heading into 2023.
The dollar index was headed for a second consecutive weekly drop, making bullion cheaper for overseas buyers.
Spot silver gained 0.5% to $23.94/oz.
Platinum fell 0.1% to $1,032.25/oz and palladium lost 0.3% to $1,748.28. Both metals headed for a second straight week of declines.
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 rise on hopes Fed will curb hikes
Prices hold steady on hopes of slower US interest rate increases
Bengaluru — Gold prices held steady on Friday but were on track for a fifth consecutive weekly gain, as a weaker dollar and hopes of slower US interest rate hikes boosted the safe-haven bullion’s appeal.
Spot gold was little changed at $1,930.04/oz at 3.08am GMT and was up 0.5% for the week. On Thursday, prices hit $1,935.20, the highest since April 2022.
US gold futures rose 0.4% to $1,931.50/oz.
The US Federal Reserve will end its tightening cycle after a 25-basis-point hike at each of its next two policy meetings and then likely hold interest rates steady for at least the rest of the year, according to a Reuters poll.
“It is possible for gold to hit $2,000 this year, but for that we need to see a down shift in hawkish tone from the Fed to confirm current market rate hike expectations,” said IG Market strategist Yeap Jun Rong.
Boston Fed president Susan Collins said on Thursday that the Fed would probably need to raise rates to “just above” 5%, while Fed vice-chair Lael Brainard said there was evidence in favour of a “soft landing” for the US economy.
With lower rates translating into lesser returns on interest-bearing assets such as government bonds, investors may prefer zero-yield gold.
“There are signals that show that the US is probably heading to a recession, this will favour gold as it is historically supportive for gold,” said Brian Lan, MD at Singapore-based dealer GoldSilver Central.
Data on Wednesday showed US retail sales dropped by the most in a year, putting the overall economy on a weaker growth path heading into 2023.
The dollar index was headed for a second consecutive weekly drop, making bullion cheaper for overseas buyers.
Spot silver gained 0.5% to $23.94/oz.
Platinum fell 0.1% to $1,032.25/oz and palladium lost 0.3% to $1,748.28. Both metals headed for a second straight week of declines.
Reuters
Gold falls as dollar firms
Gold edges higher on hopes of smaller US rate hikes
Gold rises on weak dollar and anticipation of US inflation data
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