Gold hits 3-month low on outsized BoE hike, Fed threat for more
2023.06.22 16:09
Investing.com – The gold bull is trying to hang in there, but the macro picture isn’t helping.
on New York’s Comex settled at $1,923.70 an ounce, down $21.20, or 1%, for a fourth straight day of declines. Earlier, the benchmark for U.S. gold futures fell to $1,922.65 — a new low since mid-March.
The , which reflects physical trades in bullion and is more closely followed than futures by some traders, was at $1,914.49 by 14:40 ET (18:40 GMT), down $18.25, or 0.9% on the day. It tumbled to a three-month low of $1,912.88 earlier.
“Bank-a-palooza” hits gold, slashing global outlook
The “central bank-a-palooza saw larger-than-expected tightening across several European central banks,” said Ed Moya, analyst at online trading platform OANDA. “The global growth outlook is getting slashed and that could trigger a safe-haven move back into the dollar and not necessarily gold.”
The BoE by half a percentage point — twice more than forecast — saying it needed to act against “significant” indicators that British inflation would take longer to fall. U.K.’s main interest rate is now at 5%, the highest since 2008 after the largest rate increase since February. The U.K. central bank has raised rates for 13 consecutive times to trail just behind the Federal Reserve, which has brought U.S. rates to a peak of 5.25% with 10 straight rounds of tightening.
Fed Chair Jay Powell, testifying before the Senate on Thursday, reinforced expectations that the U.S. central bank will hike rates at least twice more this year.
