14.7 C
New York
Thursday, October 6, 2022

US MIDDAY: Gold prices slide

NEW YORK: Gold prices fell more than 2% to a near three-month low on Monday as increased prospects of faster rate hikes by the Federal Reserve lifted US Treasury yields and the dollar.

Spot gold fell 1.5% to $1,867.24 per ounce by 12:46 p.m. EDT (1646 GMT), earlier hitting its lowest since Feb. 16 at $1,854.36. US gold futures dropped 2.3% to $1,868.40.

“There is pressure on gold market with the stronger dollar and yields amidst fears that the Fed might be more hawkish,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago. “China’s economic activity in their factory data hit lows which is also pulling down the metals’ market,” he added.

Investors keep a close eye on the US central bank’s Federal Open Market Committee’s two-day meeting scheduled to begin on May 3. US policymakers look set to deliver a series of aggressive rate hikes at least until the summer to fight surging inflation and high labour costs.

The yellow metal is usually considered a hedge against inflation but rate hikes will increase the opportunity cost of holding non-yielding bullion. China’s factory activity contracted in April as widespread COVID-19 lockdowns halted industrial production and disrupted supply chains.

The dollar hovered close to a 20-year high amid global growth concerns and expectations of more hawkish tone from the Fed. Benchmark 10-year US Treasury yields also rose to multi-year peaks.

“Gold is having a pull-back ahead of Fed but inflation is not transitory and if inflation moves higher then gold and silver will move higher with it in the long-term,” said Daniel Pavilonis, senior market strategist at RJO Futures.

Spot silver fell 0.8% to $22.56 per ounce, its lowest since Feb. 4 earlier in the session. Palladium slid 4.1% to $2,225.19 while platinum rose 0.5% to $935.50.

US MIDDAY: Gold prices slide

Source: Brecorder

Related Articles


Please enter your comment!
Please enter your name here

Stay Connected

- Advertisement -

Latest Articles

Popular Articles