Gold prices steady as dollar weakness counters rate-hike bets
Last updated on: 19 December,2022 11:27 am
Spot gold held its ground at $1,792.19 per ounce, as of 0505 GMT.
(REUTERS) - Gold prices were steady on Monday as prospects of further interest rate hikes by the US Federal Reserve next year countered support from a tepid dollar.
Spot gold held its ground at $1,792.19 per ounce, as of 0505 GMT.
US gold futures rose 0.2% at $1,802.80. The dollar index dipped 0.1%.
A weaker greenback makes bullion more attractive to holders of other currencies.
Gold prices are attempting to recoup losses, despite the hawkish takeaway from the Fed as upside reaction in the dollar and yields still seem more measured, said IG Market strategist Yeap Jun Rong.
Gold registered its biggest weekly decline since mid-November on Friday after Fed Chair Jerome Powell said the US central bank would deliver more hikes next year, despite growing recession worries.
Fed policymakers may need to lift US borrowing costs above the peak 5.1%, and keep them there perhaps into 2024 to squeeze high inflation out of the economy, three of them signalled on Friday.
“Further hawkish pushback from Fed officials may pose a struggle for gold,” Yeap added. Gold is considered a hedge against inflation and economic uncertainties, but rising interest rates dent bullion’s appeal as the asset pays no interest.
Gold may retest a support at $1,776 per ounce, a break below could open the way towards $1,731-$1,748 range, according to Reuters technical analyst Wang Tao.
Gold prices hit new highs
Australia’s sovereign wealth fund is increasing exposure to gold, commodities, as it warns the future will echo the low-growth, high-inflation era of the 1970s.
Spot silver lost 0.1% to $23.20, platinum was flat at $991.50 and palladium was up 0.7% at $1,725.06.
China’s business confidence hit its lowest since at least January 2013, a survey by World Economics showed, reflecting the impact of surging COVID-19 cases on economic activity in the world’s top bullion consumer.