LAST UPDATE: 21.44
Gold closed lower on Wednesday, under pressure from rising bond yields as investors remained focused on the Russia-Ukraine war.
In the post-conference trading, the price of gold fluctuated sharply after the publication of the minutes from the meeting of the US Federal Reserve in March, moving initially upwards and then negatively, as the minutes confirmed the intention of its officials. Federal Reserve to move more aggressively in tightening monetary policy aimed at curbing galloping inflation, which is hovering above 40 years.
In particular, according to the minutes of the meeting of the Federal Open Market Committee (FOMC) in March, Fed officials plan, when the shrinkage of the balance sheet of the Federal Bank, which jumped to 9 trillion. in the midst of a pandemic, to do so at a rate of $ 95 billion a month.
Fed officials “generally agreed” that a rate hike of $ 60 billion in government bonds and $ 35 billion a month in other mortgages would be reasonable, following a gradual increase over three months, minutes say. of the Federal Bank.
As for the schedule, the minutes reveal that the reduction of the balance sheet of the US Federal Reserve could start in May, however, no final decision has been made.
The minutes “did not come as a surprise, so at least the gold rush was modest,” Brien Lundin, editor of the Gold Newsletter, told MarketWatch.
In this climate, the gold delivery of June lost $ 4.40, or 0.2%, to close at $ 1,923.10 an ounce, ahead of the Fed’s release. Then, in online trading – even after the minutes were published – it initially rose to $ 1,926 and shortly thereafter fell to $ 1,921.
Investors continue to monitor developments in Ukraine. The United States, along with other G7 countries and the European Union, has announced new sanctions against Russia over its invasion of Ukraine following reports of possible war crimes as Russian forces withdrew from the area around Kyiv.
“The West continues to impose sanctions on Russia, which has the unfortunate side effect of complicating the global flow of goods and services,” said Thomas Westwater, an analyst at DailyFX. “This could keep inflation and market volatility high, which is supportive of gold,” he added.
Meanwhile, bond yields continued to rise on Wednesday, with the 10-year bond hovering above 2.65%.
In other metals, May delivery silver lost 0.3% to $ 24.458 an ounce while May delivery copper fell 1.2% to $ 4,738 a pound. At the same time, the July delivery platinum lost 2.1% to $ 953.10 an ounce while the palladium of June delivery closed at $ 2,184.70, down 2.3%.
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