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Wednesday, May 18, 2022

Gold Prices Struggle to Advance Despite Rising Safe-Haven Demand

Gold Prices Struggle to Advance Despite Rising Safe-Haven Demand© Reuters.

Investing.com – Gold prices struggled to catch a bid on safe-haven demand despite rising trade tensions between the U.S. and its allies as expectations for a faster pace of U.S rate hikes kept a lid on the yellow’s metal push higher.

for August delivery on the Comex division of the New York Mercantile Exchange fell by $2.90 or 0.23%, to $1,267.80 a troy ounce.

Reports the U.S. was readying new trade restrictions against China stoked demand for traditional safe-havens like , the and , but safe-haven flows into gold were limited.

The U.S. is reportedly drawing up plans to block firms with at least 25% Chinese ownership from buying U.S. companies with industry changing technology, raising the risk of countermeasures from Beijing.

That comes just as the impact of the EU’s tariffs on a slew of U.S. imported goods – which went into effect late Thursday – was witnessed Monday as Harley Davidson said it would move some production out of the United States.

Expectations for a faster pace of U.S. monetary policy, however, appeared to remain intact, raising the prospect of further dollar strength in the near-term, which some analysts have highlighted as the main headwind weighing on gold.

Expectations for a fourth rate hike at the Fed’s December meeting remained at nearly 50%, according to Investing.com’s Fed Rate Monitor tool.

Gold is sensitive to moves higher in both bond yields and the U.S. dollar – A stronger dollar makes gold more expensive for holders of foreign currency while a rise in U.S. rates, lift the opportunity cost of holding gold as it pays no interest.

In other precious metal trade, fell 0.81% to $16.33 a troy ounce, while lost 0.46% to $871.00 an ounce.

gained 1.41% to $3.01.

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Source: Investing.com

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