Thursday bullish session for gold albeit with marginal gains

- Advertisement -

Geopolitical uncertainty appeared to work in favor of gold, which although with marginal gains extended its bullish streak to five consecutive sessions.

In particular, the December gold contract ended trading at $1,789.70 an ounce, having imperceptibly strengthened by 0.1%.

- Advertisement -

The recent retreat in US bond yields had provided support for the precious metal, but after a series of statements from Fed officials today, bonds rallied again as the country’s monetary policymakers distanced themselves from the prospect of tightening rate of increase in interest rates.

US central bank chief Jerome Powell said last week that a softer stance from now on might be more appropriate for the tightening cycle the Fed has embarked on, but economic data does not appear to support that approach .

- Advertisement -

Against this backdrop, Cleveland Fed President Loretta Masters said today that the Bank still has a lot of work to do with rate hikes as inflation has not even peaked.

“We have more work to do because we haven’t seen that change in inflation yet,” he told the Washington Post.

A little earlier, after all, the head of the Chicago Fed, Charles Evans, had mentioned that an interest rate increase of 75 basis points is still on the table for September.

It is recalled that higher interest rates work competitively for gold which does not give a fixed return on investment.

But the precious metal appeared to find support from geopolitical tensions in east Asia that underlined its status as a safe haven investment, as US House Speaker Nancy Pelosi finally followed through on her intention to visit Taiwan, angering Beijing. .

As Edward Moya, senior market analyst at Oanda notes, “rising tensions between the world’s two largest economies will not support risk appetite in the near term.”

Elsewhere, the trends in other metals were bearish, with silver closing at $20.14 an ounce, down 0.3%.

Palladium plunged 5% to close at $2,090 an ounce, copper lost 0.7% to $3,518 a pound, while platinum was rescued with small gains of 0.4% at $905 an ounce.

Source: Capital

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Hot Topics

Related Articles