Last updated: June 29, 2023, 2:42 AM IST
New York, United States of America (USA)
Powell reiterated that more rate hikes are likely ahead for the central bank, and did not rule out an increase in the cost of borrowing at a policy meeting scheduled for late July.
Spot gold fell 0.1% to $1,912.49 an ounce at 1:43 p.m. EDT (1743 GMT), after hitting its lowest point since mid-March
Gold prices fell to a nearly 4-month low on Wednesday on bets that interest rates would stay high even longer, as US Federal Reserve Chairman Jerome Powell reiterated an aggressive stance.
Spot gold was down 0.1% to $1,912.49 an ounce at 1:43 p.m. EDT (1743 GMT), after hitting its lowest point since mid-March. US gold futures closed 0.1% lower at $1,922.20.
Powell reiterated that more rate hikes are likely ahead for the central bank, and did not rule out an increase in the cost of borrowing at a policy meeting scheduled for late July.
“While the market is pricing in a fair chance that the Fed will raise in July, the more relevant factor for gold is that the market has simultaneously factored in the number of cuts we can expect over the next year,” said Daniel Ghali. , commodity strategist at TD Securities.
Markets were pricing in an 82% chance of a rate hike at the next Fed meeting in July, and saw little chance of monetary policy easing by the end of this year, according to the CME FedWatch tool.
The dollar index strengthened 0.4%, making gold less attractive to foreign buyers. A decline in 10-year government bond yields limits further downward trend.
“Good economic data in the US continues to be a headwind for the yellow metal, as it likely discourages Fed officials from taking an aggressive tone,” said UBS analyst Giovanni Staunovo.
US new single-family home sales rose to their highest level in nearly 1.5 years in May, while US consumer confidence also jumped in June.
“We still expect aggressive monetary policy tightening to weaken US economic data at some point and result in a change of tone at the Fed,” added Staunovo.
High interest rates discourage traders from investing in non-performing gold.
Silver fell 0.3% to $22.81 an ounce, platinum fell 1.4% to $912.20 after an eight-month low, and palladium fell 3.7% to $1,248.06, the lowest in 4 -1/2 years.
(This story has not been edited by News18 staff and was published from a syndicated news agency feed – Reuters)