Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Gold Loses Some Sheen as Hawkish Fed Outweighs Softer Inflation

Published 08/11/2022, 10:37 PM
Updated 08/11/2022, 10:55 PM

By Ambar Warrick

Investing.com-- Gold prices retreated on Friday, as hawkish comments on interest rate hikes by the Federal Reserve outweighed optimism over signs of cooling U.S. inflation.

As of 22:17 ET (02:17 GMT), spot gold was down 0.1% at $1,788.13 an ounce, while gold futures held around $1,803.50. Still, both instruments were set for mild gains this week, marked by a sharp fall in the dollar.

But overnight comments from Fed officials on the path of policy tightening kept investors uncertain over future interest rates.

San Francisco Fed President Mary Daly said she was open to a 75 basis point rate hike in September, noting that inflation still remained around 40-year highs, Reuters reported. Chicago Fed President Charles Evans also said this week that the Fed would need to raise rates to at least 3.25% to 3.5% by the year-end, to combat inflation.

U.S. benchmark rates are currently between 2.25% to 2.5%.

Their comments offset optimism over an unexpected fall in U.S. producer price inflation in July, data showed on Thursday. This came after a reading on Wednesday showed U.S. consumer price inflation remained static through July, after rising exponentially earlier in the year.

While both readings caused a pullback in the dollar index, investors remained uncertain over the path of U.S. monetary policy this year, given that there is more inflation and employment data due before the Fed’s next meeting. Treasury yields also rose this week.

Prices of other precious metals reflected this trend. Platinum futures fell 0.6%, while silver retreated 0.4%.

Among industrial metals, copper futures fell 0.3%, as concerns over slowing manufacturing activity across the globe continued to weigh on the red metal.

While copper is set for a mild weekly gain on weakness in the dollar, it still faces risks from a slowdown in major importer China.

Rising COVID cases in some parts of the mainland are likely to trigger more losses in copper prices.

Latest comments

gold
gold
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.