Gold Down as Investors Continue Digesting Hawkish Powell Remarks
2022.05.18 07:56
By Gina Lee
Investing.com – Gold was down on Wednesday morning in Asia, with the dollar continuing its retreat from a 20-year high and countering pressure from stronger Treasury yields. Investors also digested the latest hawkish comments from U.S. Federal Reserve Chairman Jerome Powell.
Gold futures were down 0.59% to $1,808.24 by 12:48 AM ET (4:48 AM GMT). The dollar, which normally moves inversely to gold, edged up on Wednesday but extended its decline into a fourth day. Investors’ increased appetites for riskier bets also took the edge off the safe-haven greenback’s appeal.
However, yields on the benchmark U.S. 10-year Treasury note steadied after their sharp increase during the previous session.
Powell on Tuesday pledged that the U.S. central bank would hike interest rates as needed to curb sky-high inflation that he said threatened the foundation of the economy. The Fed has hiked its interest rate by three-quarters of a percentage point in 2022 to date and is on track to hike it again in half-percentage-point increments at its next two meetings in June and July 2022.
Philadelphia Fed President Patrick Harker will speak, and a G-7 finance ministers and central bankers meeting will take place, later in the day.
In Asia Pacific, Japan’s GDP contracted 1% year-on-year and 0.2% quarter-on-quarter in the first quarter of 2022, while Australia’s wage price index grew 2.4% year-on-year and 0.7% quarter-on-quarter.
Strong U.S. retail sales and factory data for April gave investor sentiment a boost, with consumers purchasing motor vehicles and frequenting restaurants, showing no signs of a slowdown in demand despite high inflation.
In other precious metals, silver and palladium edged up 0.2%, while platinum inched up 0.1%.
