Business News

Gold Nears 2-Week Low As Dollar Strengthens Following Fed Minutes

On Thursday, gold prices were close to a two-week low as the dollar rose on reports that the Federal Reserve would keep raising interest rates to control inflation, according to minutes from its July meeting.

As of 0645 GMT, spot gold remained unchanged at $1,761.69 per ounce after hitting its lowest level since Aug. 3 on Wednesday at $1,759.17.

The price of US gold futures increased by 0.1% to $1,775.50 per ounce.

Gold became more expensive for customers holding other currencies this week as the dollar increased by 0.2% near a three-week high set earlier in the week.

“Gold appears to be constrained within a price range of $1,750–1,800. Gold prices are being impacted by the anticipation of Fed rate increases and the beginning of a slowdown in inflation “said Kunal Shah, Nirmal Bang Commodities’ head of research.

“On the geopolitical front, there are, nevertheless, many uncertainties. Therefore, the sum of these factors is unable to cause a breakout in gold.”

The Fed was considering slowing down the rate at which it raised rates in the future to coincide with a slowing of inflation, according to the minutes of its July meeting, but it found “little evidence” that pressures were lessening just yet.

Traders currently predict that the Fed will raise rates by 50 basis points in September, with a 42.5% likelihood of doing so.

Benchmark US 10-year Treasury yields were near a one-month high.

Due to the Fed’s quick rate hikes to reduce inflation pressures, gold prices have plummeted more than $300, or roughly 15%, after climbing above the important $2,000 per ounce level in early March.

The largest gold-backed exchange-traded fund in the world, SPDR Gold Trust, saw its holdings fall 0.32% to 989.01 tonnes on Wednesday, reflecting market sentiment.

Among other commodities, spot silver dropped 1.1% to $19.62 per ounce, platinum dropped 1% to $914.77, and palladium dropped 0.3% to $2,134.13.

0.00 avg. rating (0% score) - 0 votes

Leave a Reply

Your email address will not be published.