Gold Prices Remain Rangebound Amid Fed’s Higher-For-Longer Rates
Gold Prices Rise Slightly in Asian Trade
Gold prices rose slightly in Asian trade on Thursday, but remained largely within a recent trading range as a slew of signals from the Federal Reserve reiterated the prospect of higher-for-longer U.S. interest rates.
Bullion Prices Find Relief After Dollar’s Sharp Fall
Bullion prices saw some relief this week as the dollar fell sharply from three-month highs. But further losses in the greenback now appeared limited, as Treasury yields remained close to recent peaks.
Gold Remains Within a Trading Range
Gold moved largely within a $2,000 to $2,050 an ounce trading range established over the past month. While further gains in the yellow metal were stymied by the prospect of higher rates, its downside was also limited by increased concerns over worsening economic conditions across the globe, especially as Japan and the UK entered a recession.
Gold Prices Experience Slight Increase
Gold rose 0.2% to $2,029.78 an ounce, while futures expiring in April rose 0.3% to $2,039.55 an ounce by 00:13 ET (05:13 GMT).
Fed Minutes and Official Addresses Reiterate Rate Outlook
The Fed minutes, released on Wednesday, showed that the bank was in no hurry to begin cutting interest rates early. This notion was echoed by a slew of Fed officials this week, who cited concerns over sticky inflation and persistent strength in the U.S. economy.
Traders React to Fed’s Rate Cut Expectations
The comments saw traders largely wipe out expectations for rate cuts in March and May, while also ramping up expectations that the central bank will keep rates steady in June.
Prospect of Higher-For-Longer Rates Bodes Poorly for Gold
The prospect of higher-for-longer rates bodes poorly for gold, given that it increases the opportunity cost of investing in the yellow metal.
Precious Metals Experience Mixed Movement
Other precious metals rose on Thursday, but were nursing steep losses from the prior session. Platinum rose 0.4% to $894.10 an ounce, while silver rose 0.6% to $23.012 an ounce.
Copper Prices Steady as China Optimism Cools
Among industrial metals, copper prices steadied at three-week highs as investors waited to see if the Chinese government would roll out more stimulus measures. Futures expiring in March hovered around $3.8792 a pound, and were trading up 1.1% this week.
Chinese Economy Struggles Amid Weak Growth
A slew of supportive measures from the Chinese government had boosted copper prices in recent sessions. But markets were now waiting to see whether the government will roll out more support, given that the Chinese economy was nursing three years of weak growth.
