Gold above 1800 due to weak dollar
2022.12.21 04:27
Gold above 1800 due to weak dollar
Budrigannews.com – On Wednesday, gold prices reached a one-week high as the dollar fell sharply against a basket of currencies. However, the outlook for the yellow metal remained uncertain due to concerns about a recession and rising interest rates.
Tuesday saw a nearly 2% increase in the price of gold after a spike in the price hurt the dollar and raised concerns about rising interest rates. This was sparked by the sudden adjustment of its extremely loose monetary policy for the first time in almost a decade.
In a sign that it may be willing to tighten policy in the coming year, the BOJ increased the range within which the yields on benchmark Japanese government bonds are allowed to fluctuate.
The move indicates that global interest rates are likely to rise further in 2023 and follows hawkish signals from a number of other developed market central banks. Even though this is bad news for non-yielding assets like gold, the possibility of an economic slowdown also made the yellow metal more popular as a safe haven.
by 20:11 ET (01:11 GMT), it had increased by 0.1% to $1,819.67 an ounce and by 0.2% to $1,828.55 an ounce. On Tuesday, both instruments rose by nearly 2% and were trading at a one-week high.
Fears of a recession in 2023 have also grown as a result of the weaker-than-expected economy. This could be good news for gold, as there is speculation that the current cycle of interest rate increases may be coming to an end.
As a result, the dollar has lost some of its gains this year. After raising interest rates earlier this month by a relatively smaller margin, the is currently trading close to six-month lows.
However, investors are still unsure of the location of the U.S. interest rate peak. In the year 2023, hawkish signals from other major central banks have also created uncertainty regarding monetary policy.
On Tuesday, other precious metals rose, and on Wednesday, their prices remained steady.
On Wednesday, the price of a pound of industrial metals increased by 0.3 percent to $3.8178, up from 0.7 percent in the previous session.
However, gains in the red metal were hampered by rising concerns regarding the economic reopening in China, a major importer that is battling an unprecedented rise in COVID-19 infections.
Fears of an expected downturn in 2023 have likewise burdened copper costs in late meetings, given the metal’s cozy relationship with financial development.
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