admin
Gold edged up yesterday, but moves were fairly contained as the market looked to the US Federal Reserve’s next policy meeting where it is widely expected to raise rates in an attempt to quell surging inflation.
Spot gold rose 0,2 percent to US$1 817,90 per ounce as of 2:17pm. US gold futures gained 0,3 percent to US$1 817,40.
“The gold market is moving on Fed rate expectations,” IG Markets analyst Kyle Rodda said.
Rodda noted that the ongoing geopolitical considerations including concerns around Ukraine and Russia could be an impetus to buy gold for some, but “in the bigger picture, that issue is minor compared to Fed policy.”
Asian and European shares fell, helping safe-haven gold recover from a one-week low of $1 805 an ounce hit on Tuesday.
If yields continue to push higher, it is quite likely that gold will drift down back towards US$1 800 an ounce, but gold’s still stuck in the same range that it’s been in the last few months, said Michael Hewson, chief market analyst at CMC Markets UK.
“The $1 830 level proves to be fairly insurmountable in the short term, with further gains in yields and the dollar likely to put downward pressure on gold prices.”
The US dollar index held near a weekly high, underpinned by a rally in US Treasury yields to two-years highs, on aggressive rate hike bets ahead of Fed’s meeting on January 25-26.
Higher interest rates tend to dim the appeal of non-yielding bullion. — Reuters
Online Reporter