Gold Prices Ease From Highs as Dollar Rises on Rate Hikes Expectations

Investing.com – Gold prices eased from near-four-month highs amid dollar strength as investors remained optimistic on the pace of US monetary policy tightening despite mixed signals from Fed officials.

for February delivery on the Comex division of the New York Mercantile Exchange fell by $2.60, or 0.20%, to $1,319.80 a troy ounce.

Atlanta Fed President Raphael Bostic said Monday while he supported the Federal Reserve “slow removal” of monetary policy accommodation, the central bank may

Bostic struck a more dovish tone than his San Francisco counterpart Fed Williams, who on Saturday said three rates remained appropriate for 2018 amid expectations that President Donald Trump’s tax reform plans would give the economy a boost.

Despite the prospect of global monetary tightening from the Federal Reserve, Bank of England and Bank of Canada this year, BofA Merrill Lynch said it expects gold prices to rise to $1,350 an ounce by the third quarter of the year.

The Bank of Canada could raise rates as soon as next week, Action Economics said, as a recent swathe of positive data on the labor market may force the central bank’s hand on monetary policy tightening.

Nomura’s George Buckley – who correctly predicted that the Bank of England would hike interest rate in November – said recently that there is room for more rate hikes, estimating the Bank of England would raise rates four times by the end of 2019 to curb inflation, which is running well above target.

In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to other interest-bearing assets such as bonds.

In other precious metal trade, fell 0.93% to $17.13 a troy ounce, while gained 0.11% to $946.30.

fell 0.05% to $3.23, while rose 0.86% to $2.82. The rise in natural gas comes as a much colder 6-to-10day forecast is supporting the front-end of curve.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.