Gold prices plunged Monday as US Federal Reserve Chairman Jerome Powell admitted that the US central bank’s swift reversal of rate hikes was not over yet.
The gold spot fell 0.8% to $1,723.29 an ounce by 0923 GMT, hitting $1,719.56, its lowest since July 27, in the first half of the session. US gold futures fell 0.9% to his $1,734.90.
The dollar index hit a 20-year high, making greenbacked bullion more expensive to foreign buyers. [USD/]
In a speech at the Jackson Hole Central Bank Conference in Wyoming, Powell’s remarks spurred a recent wave of policymakers to push back against market expectations that the Fed would quickly roll back monetary policy. .
“The idea of a dovish turn by the Fed is premature, and as long as the Fed’s message that rates will stay high for longer is heeded, gold will be held back,” said chief market analyst Han Tan. It is expected to continue,” he said. at Xinity.
However, gold bulls find solace in the recent history that “psychologically important marks have provided strong support in recent years and gold’s dip below $1,700 proved to be short-lived.” Maybe,” Tan added.
Markets are currently pricing in a 75 basis point rate hike at the Fed’s September meeting. Gold tends to suffer in an environment where rising interest rates increase the opportunity cost of holding bullion.
Commodities and currencies said once the market understood the fact that interest rates are likely to continue rising for some time, the focus shifted to an economic slowdown caused by rising interest rates, which is likely to support gold prices. said Sugandha Sachdeva, Vice President of Research. at Religare Broking.
Spot silver fell 1.5% to $18.59 an ounce, platinum fell 1.1% to $854.25 and palladium fell 0.4% to $2,102.59.
(Reporting by Arundhati Sarkar and Eileen Soreng, Bengaluru; Editing by Krishna Chandra Eluri)
(Only the headlines and photos in this report may have been modified by Business Standard staff. The rest of the content is auto-generated from syndicated feeds.)
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