Gold firms on Fed slowdown hopes; investors assess Poland blast


Article content

Gold prices steadied near a three-month peak on Wednesday as signs of cooling U.S. inflation boosted bets for smaller rate hikes, while markets awaited more clarity surrounding reports of Russian missiles killing two people in Poland.

Spot gold held its ground at $1,776.73 per ounce, as of 0300 GMT, after hitting its highest since Aug. 15 in the previous session.

Article content

U.S. gold futures rose 0.2% at $1,780 per ounce.

“Gold is still largely pinned on the Fed … We can see gold is kind of continuing to creep higher since last week’s spike, but it hasn’t really found tremendous follows through,” said DailyFX currency strategist Ilya Spivak.

Advertisement 2

Article content

“Needless to say, wild card factors can exist like some sort of more aggressive and more immediate escalation in Ukraine, you could see gold become reactive.”

The United States and its NATO allies are investigating the blast that killed two in Poland, but early information suggests it may not have been caused by a missile fired from Russia, U.S. President Joe Biden said. Russia denied it was responsible.

Data on Tuesday showed U.S. producer prices increased less than expected in October, further evidence that inflation was starting to subside.

The data, following last week’s smaller-than-expected increase in consumer prices for October, has lifted hopes that the U.S. Federal Reserve could slow its interest rate hikes going forward.

Advertisement 3

Article content

However, Atlanta Fed President Raphael Bostic said he sees little evidence that aggressive monetary policy tightening is slowing inflation, anticipating that more hikes would be needed to get inflation down to the Fed’s 2% target.

While gold is used as a safe investment during times of political and financial uncertainty, rising interest rates tend to dull bullion’s appeal as the metal pays no interest.

Elsewhere, spot silver gained 0.3% to $21.59 per ounce. Platinum edged 0.1% higher to $1,015.46, while palladium fell 0.5% to $2,087.06. (Reporting by Brijesh Patel in Bengaluru; Editing by Sherry Jacob-Phillips)



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

Comments are closed.