Wednesday, December 7, 2022
HomeBusinessGold wallows in range as Fed’s Powell shoots down pivot hopes

Gold wallows in range as Fed’s Powell shoots down pivot hopes

By Eileen Soreng
(Reuters) -Gold prices oscillated in a narrow range on Thursday, following a volatile session, after U.S. Federal Reserve Chair Jerome Powell tamped down on expectations of a policy pivot saying it was “premature to discuss pausing.”

Spot gold was little changed at $1,637.20 per ounce by 0415 GMT, after falling 0.8% on Wednesday.

U.S. gold futures fell 0.6% to $1,640.20.

The Fed raised interest rates by 75 basis points on Wednesday, as expected, and said its battle against inflation will require borrowing costs to rise further, yet signalled it may be nearing an inflection point.

Powell, in a press conference, said the Fed has “ways to go with interest rates before we get to the level that’s sufficiently restrictive.”

There is a sort of consolidative stalling here in gold after a fair bit of conflicting signals from the Fed, said DailyFX currency strategist Ilya Spivak said adding Friday’s U.S. jobs report due on Friday could be a decisive moment.

“If the jobs numbers reinforce this combative rhetoric that we heard from Powell, gold can take out the range floor (at $1,615) and try to extend downward in a more meaningful way.”

Spot gold rose as much as 1.3% after the release of the policy statement at the end of the two-day meet. However, it later gave up gains on Powell’s remarks.

Although gold is considered a hedge against inflation, higher U.S. interest rates increase the opportunity cost of holding the non-yielding asset and boosts the dollar.

The dollar index was slightly lower in Asian hours after touching its highest level since Oct. 24 earlier at 112.19.

Further cues on the resilient U.S. labour market will be watched for when the nonfarm payrolls data gets released on Friday.

Spot silver rose 0.3% to $19.34 per ounce, platinum edged higher 0.3% to $932.81 and palladium gained 0.5% to $1,864.32.

(Reporting by Eileen Soreng in Bengaluru; Editing by Rashmi Aich and Uttaresh.V)

Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.

Source: The Print

- Advertisment -

Most Popular

Recent Comments