Gold at its peak in anticipation of completion of interest rate hike
2023.01.03 09:19
Gold at its peak in anticipation of completion of interest rate hike
Budrigannews.com – On Tuesday, a growing number of bets that the Federal Reserve will slow its pace of rate hikes even further, which is expected to weigh on the dollar and Treasury yields, caused gold prices to rise and close to a six-month high.
Despite the fact that the yellow metal finished 2022 slightly lower, it is expected to benefit from a slower pace of rate increases this year, as recent data indicate that inflation in the United States has likely reached its peak. Metal markets had suffered greatly over the past year as a result of rising interest rates.
By 19:45 ET (00:45 GMT), prices had increased 0.4% to $1,831.67 per ounce and 0.6% to $1,837.85 per ounce. Near their highest levels since late June, both instruments were trading.
The yellow metal received a lot of bids toward the end of December, as there was growing concern that the Fed would only raise interest rates slightly in February. After raising rates by a relatively small amount in December, the central bank is now expected to raise rates by 25 basis points at its first meeting of the year, according to the market.
Even though the strength in and rising demand for the yellow metal sapped safe-haven demand, this also helped gold outperform the majority of risk-driven assets for the year.
In 2022, other precious metals performed much better than gold. Prices increased by more than 10% as a result of worries about supply shortages brought on by U.S. sanctions on Russian producers, while prices increased by more than 4% as a result of expectations of increased demand.
Center this week presently goes to the arrival of the , due on Wednesday. Markets will keep an eye out for any additional indications that the central bank intends to further slow the rate at which it raises interest rates in the months to come.
Also benefiting from a weaker dollar, the price of a pound of industrial metals increased by 0.6 percent to $3.8425.
Bets that a Chinese economic reopening will fuel a recovery in demand have resulted in significant gains for the red metal in recent sessions. Copper imports are the largest in the world.
As a result of disruptions caused by COVID, China’s economic growth came to a halt in 2022, causing copper prices to drop by nearly 12%. However, the majority of the country’s stringent COVID measures have now been relaxed.
Markets are betting on an eventual economic recovery as more areas of the country reemerge from nearly three years of lockdowns, despite the fact that this resulted in an unprecedented increase in local COVID infections.
More Yen starts the year with strengthening
