Gold rises as US dollar weakens after Fed chair’s inflation remarks
Investors are tracking the dollar and global economic situation for direction as interest rates are expected to rise
08 February 2023 - 07:28
byKavya Guduru
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Bengaluru — Gold prices ticked higher on Wednesday as the dollar retreated from a one-month peak after US Federal Reserve chair Jerome Powell did not revert to a more hawkish stance, despite last week’s stronger-than-expected jobs report.
Spot gold was up 0.1% at $1,876.49 per ounce at 3.51am GMT. US gold futures firmed 0.2% at $1,888.10.
“No major takeaways for gold from Powell’s comments yesterday, as gold prices were already corrected due to last week’s positive economic release,” said Hareesh V, head of commodity research at Geojit Financial Services.
Traders are tracking the performance of the dollar and the global economic situation to get a direction while awaiting fresh cues, Hareesh said further.
Powell reiterated on Tuesday that inflation was starting to come down, but cautioned last week’s blockbuster jobs report showed why the battle against inflation will “take quite a bit of time” and interest rates might need to move higher than expected.
After Powell’s remarks, the dollar index eased from a one-month high and was down 0.1% on the day. A weaker dollar makes greenback-priced gold a more attractive bet for buyers holding other currencies.
Minneapolis Fed President Neel Kashkari said the Fed would probably have to raise interest rates to at least 5.4% to tame high inflation.
Market participants see interest rates rising above 5% in May.
Though gold is seen as an inflation hedge, high interest rates lift the opportunity cost of holding the non-yielding asset.
Meanwhile, China held 65.12-million fine troy ounces of gold at the end of January, up from 64.64-million ounces at the end of December, central bank data showed.
Elsewhere, spot silver rose 0.6% to $22.31 per ounce, after hitting its lowest level in two months in the previous session.
Platinum was 0.3% higher at $976.48 and palladium edged up 0.1% to $1,647.33.
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 rises as US dollar weakens after Fed chair’s inflation remarks
Investors are tracking the dollar and global economic situation for direction as interest rates are expected to rise
Bengaluru — Gold prices ticked higher on Wednesday as the dollar retreated from a one-month peak after US Federal Reserve chair Jerome Powell did not revert to a more hawkish stance, despite last week’s stronger-than-expected jobs report.
Spot gold was up 0.1% at $1,876.49 per ounce at 3.51am GMT. US gold futures firmed 0.2% at $1,888.10.
“No major takeaways for gold from Powell’s comments yesterday, as gold prices were already corrected due to last week’s positive economic release,” said Hareesh V, head of commodity research at Geojit Financial Services.
Traders are tracking the performance of the dollar and the global economic situation to get a direction while awaiting fresh cues, Hareesh said further.
Powell reiterated on Tuesday that inflation was starting to come down, but cautioned last week’s blockbuster jobs report showed why the battle against inflation will “take quite a bit of time” and interest rates might need to move higher than expected.
After Powell’s remarks, the dollar index eased from a one-month high and was down 0.1% on the day. A weaker dollar makes greenback-priced gold a more attractive bet for buyers holding other currencies.
Minneapolis Fed President Neel Kashkari said the Fed would probably have to raise interest rates to at least 5.4% to tame high inflation.
Market participants see interest rates rising above 5% in May.
Though gold is seen as an inflation hedge, high interest rates lift the opportunity cost of holding the non-yielding asset.
Meanwhile, China held 65.12-million fine troy ounces of gold at the end of January, up from 64.64-million ounces at the end of December, central bank data showed.
Elsewhere, spot silver rose 0.6% to $22.31 per ounce, after hitting its lowest level in two months in the previous session.
Platinum was 0.3% higher at $976.48 and palladium edged up 0.1% to $1,647.33.
Reuters
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