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Gold declined for a third day after bond yields climbed ahead of a key Federal Reserve meeting where policy makers are set to raise interest rates.
Bullion has eased after rallying to within US$5 of a record last week as Russia’s invasion of Ukraine and accelerating inflation boosted demand for the haven asset. The war has led to sustained inflows into bullion-backed exchange-traded funds, driving total holdings to the highest level in a year, according to initial data compiled by Bloomberg.
Months of speculation about a new wave of interest-rate hikes look to be coming to a head on today, when the US central bank is expected to begin tightening to rein in decades-high inflation, which is being exacerbated by surging commodity prices.
Markets now indicate they expect about seven quarter-point Fed rate hikes in 2022. The 10-year Treasury yield extended gains after rising to its highest level since July 2019 on Monday, which reduced the appeal of non-interest-bearing gold.
“Price action will depend on Fed commentary in the short-term, but I wouldn’t be surprised to see gold rally on the day of the Fed hike. — Bloomberg.
Online Reporter