Gold Down, Set for First Weekly Gain Since April Over Growth Concerns
2022.05.20 07:46
By Gina Lee
Investing.com – Gold was down on Friday morning in Asia but set for its first weekly gain since mid-April 2022. The dollar retreated from two-decade highs and growing concerns over U.S. economic growth saw investors turn to the safe-haven asset.
Gold futures inched down 0.01% to $1,841.05 by 12:34 AM ET (4:34 AM GMT), with the yellow metal climbing about 1.5% in the week to date.
“Recession fears are now giving way to U.S. growth fears, and the latter is helping gold,” SPI Asset Management managing partner Stephen Innes told Reuters.
However, the U.S. Federal Reserve’s aggressive rate hike path and quantitative tightening would still be major down-drafts for gold, he added.
The U.S. central bank will hike interest rates higher by the end of 2022 than anticipated just a month ago, keeping the already signification risks of a recession alive, according to a Reuters poll of economists.
In Asia Pacific, the People’s Bank of China held the one-year loan prime rate (LPR) at 3.7%, while cutting the five-year LPR to 4.45% from the previous month’s 4.6%. The Reserve Bank of New Zealand will also hand down its policy decision in the following week.
“It’s been an exciting week, after the clear-out below$1,800 driven by higher real yields, it opened the door for long-term strategic buyers to step in front of a technical downtrend,” said Innes.
Reflecting this rising demand, SPDR Gold Trust (P:GLD) also said its holdings rose 0.66% to 1,056.18 tons on Thursday, following its recent losses.
In other precious metals, silver fell 0.3% to $21.83 per ounce but has gained about 3.6% during the past week. Platinum fell 0.7% and palladium inched down 0.1% but set for weekly gains of about 1.7% and 2.8% respectively.
