Gold closed with small losses – Up in electronic trading after the Fed decision

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Gold closed with small losses on Wednesday before the announcement of the decisions of the Federal Bank to increase interest rates by half a percentage point.

Specifically, the gold June delivery fell $ 1.80, or 0.1%, to $ 1,868.80 an ounce. However, after the second in a row increase in interest rates announced by the Federal Reserveand in fact by 50 basis points – for the first time since 2000 – the price of gold strengthened in electronic transactions by 0.2% to $ 1,873.

It is noted that the Fed set aside the usual tactics of increases of 0.25%, with the Federal Open Market Committee (FOMC) unanimously deciding to increase its interest rates in the range of 0.75% -1.00%, confirming the estimates of the market, while other increases of a similar amount are expected to follow.

At the same time, the FOMC announced the quantitative tightening of its balance sheet, which in the midst of the pandemic amounted to approximately 9 trillion. from June 1, accelerating its moves to reduce inflationary pressures.

“The Fed’s current 50 basis point increase is fully priced, so it would take more than expected to see significant market activity today,” Rupert Rowling, a Kinesis Money analyst, said in a statement. “At the moment, gold is looking for the next level of support to prevent a bigger drop and does not hope to regain the $ 1,900 limit in the short term.”

“The dollar has lost ground since the Fed decision and that supports the price of gold, as some believed the Fed could raise interest rates by 75 basis points.” said Naeem Aslam, an AvaTrade analyst.

In addition to the other metals, the silver July delivery lost 29 cents, or 1.3 percent, at $ 22.37 an ounce.

THE copper July delivery gained 0.7% to $ 4.31 a pound and its contract platinum added 1.2% to $ 970.10 an ounce. Finally, the palladium June delivery lost 0.2% to $ 2,235 an ounce.


Source: Capital

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