Gold 2% Loss – Lost $ 1,800 after 3 weeks

Gold fell significantly below $ 1,800 on Thursday for the first time in almost three weeks as the precious metal came under pressure from the stronger dollar following the Federal Reserve signal that it would raise interest rates from March. .

In particular, the dollar jumped 1.3%, according to the ICE US Dollar index, to its highest level since July 2020, in the wake of US GDP data, which in October-December grew at an annual rate of 6.9% .

Economists in a Dow Jones poll expected lower growth, at 5.5%. However, the US economy grew faster than expected in the fourth quarter, as consumer spending rose and businesses had stocks to meet demand.

Meanwhile, the US Federal Reserve yesterday kept its interest rates unchanged, confirming analysts’ estimates that it will wait until March to proceed with raising interest rates from their historic lows.

Federal Reserve Chairman Jerome Powell also confirmed the bank’s plans to end bond purchases along with raising interest rates and then shrinking its balance sheet.

“Gold sank after a surprise surprise for the fourth quarter GDP, which indicates that the Fed will have even more room to tighten its monetary policy,” Brien Lundin, editor of the Gold Newsletter, told MarketWatch.

“Much of this GDP growth, however, was due to very significant stock increases and also largely reflects family economic activity,” he said. “That’s why GDP growth in the first quarter of 2022 is likely to slow down, but markets are not looking so far into the future.”

Lundin said he expects gold prices to continue to fluctuate “until the Fed starts raising interest rates in March”, adding that “history shows that the price of the precious metal is falling before a tightening cycle, but is strengthening as soon as the increases start in practice “.

In this climate, the gold delivery in February lost $ 36.60, or 2%, to $ 1,793.10 an ounce, losing $ 1,800 for the first time since Jan. 10 and falling to its lowest level since Jan. 6, according to FactSet.

As for the other metals, the March delivery silver lost 4.8%, or $ 1.13, to $ 22.676 an ounce.

March delivery rose 0.7 percent to $ 2,366.50 an ounce, its highest level since early September.

The March delivery contract for copper lost 2% to $ 4,424 per pound and the March delivery platinum slipped 2.3% to $ 1,021.80 an ounce.