Home Business Gold prices dip as dollar firms ahead of U.S. Fed meet

Gold prices dip as dollar firms ahead of U.S. Fed meet

6 min read
Comments Off on Gold prices dip as dollar firms ahead of U.S. Fed meet
0
26


Article content

Gold prices slipped on Monday, pressured

by a firmer dollar as investors braced for aggressive rate hikes

Article content

by major central banks this week, especially from the U.S.

Federal Reserve, to tame high inflation.

Spot gold was down 0.6% at $1,665.08 per ounce, as of

0623 GMT. U.S. gold futures fell 0.6% at $1,673.30.

Trading is expected to be light with bullion market in

London, the world’s biggest trade center for physical gold,

being closed for Queen Elizabeth’s funeral.

The dollar index gained 0.2%, making bullion more

Advertisement 2

Article content

expensive for overseas buyers.

“We’ll see some choppy, sideways trade leading up to the

FOMC meeting, with $1,680 likely being a pivotal level for

traders over the near-term,” said Matt Simpson, a senior market

analyst at City Index.

“A hawkish hike would be another nail in the gold coffin,

and will likely send prices down to the $1600–$1650 range.”

The U.S. Fed’s Federal Open Market Committee is expected to

begin its two-day meeting on interest rates on Sept. 20 and

announce its decision the following day. Markets are fully

pricing in a 75-basis-point rate hike by the U.S. central bank.

Most of the banks meeting this week – from Switzerland to

South Africa – are expected to hike, with markets split on

whether the Bank of England will go by 50 or 75 basis points.

Advertisement 3

Article content

U.S. consumers’ near-term inflation expectations fell to a

one-year low in September, easing fears that the Fed could raise

interest rates by a full percentage.

Gold is known as a safe investment amid inflation woes, but

high interest rates increase the opportunity cost of holding

non-yielding bullion.

“Rising geopolitical and economic risks are doing little to

entice (safe) haven buying, with the U.S. dollar still the asset

of choice,” said ANZ in a note.

Spot silver lost 1.2% to $19.32 per ounce, platinum

fell 0.8% to $900.17 and palladium was down 1.7%

at $2,097.45.

(Reporting by Brijesh Patel and Ashitha Shivaprasad in

Bengaluru; Editing by Sherry Jacob-Phillips)

Advertisement

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.



Source link

Load More Related Articles
Load More By 
Load More In Business
Comments are closed.

Check Also

year JGB yield falls, longer-term notes keep rising

Article content TOKYO — The Japanese government bond market moved in mixed directions on W…