Gold prices stabilized on Wednesday to recover some of the losses they suffered a day earlier, then oscillated between losses and gains after the Federal Reserve’s policy-setting committee announced the largest increase in interest rates in nearly 30 years.
August or GCQ22,
rose $6.10, or 0.3%, to settle at $1,819.60 an ounce on the Comex, recouping some of Tuesday’s 1% decline. It was trading at $1,822.10 in electronic trading shortly after the Fed’s announcement.
July silver SIN22,
nailed down 47 cents, or 2.2%, to $21.42 an ounce.
July platinum PLN22,
climbed $13.90, or 1.5%, to $924.60 an ounce.
September palladium PAU22,
gained $54.10, or 3%, to $1,834.30 an ounce.
July copper HGN22,
settled at $4.1635 a pound, up a penny, or 0.2%
What analysts say
About half an hour after gold futures prices stabilized on Wednesday, the Fed announced it would raise the target federal funds rate by three-quarters of a percentage point, between 1.5% and 1, 75%. In its “point forecast,” the Fed said it plans to raise its benchmark interest rate to a mid-range 3.4% by the end of this year and to 3.8% by the end of this year. by the end of 2023.
Gold prices had stabilized higher ahead of the decision, rebounding a bit from Tuesday’s 1% decline, then swinging between losses and gains soon after the Fed’s announcement.
“The driving force moving gold prices are inflation expectations,” Jeff Klearman, portfolio manager at GraniteShares, told MarketWatch in an email after the rate decision. “As the Fed moves to raise rates…uncertainty around inflation expectations prevails, despite a 75 [basis point] increase in Fed funds target rates.
And “as rates rise, expectations of recession and falling stock prices
increase, both of which are supporting gold prices,” he said.
Commerzbank strategists said Wednesday that gold rallied on the back of a weaker U.S. dollar during Wednesday’s session in New York.
The ICE US Dollar Index, DXY,
a measure of the dollar’s performance against a basket of its rivals, was little changed after the Fed’s announcement, having traded between a high of 105.788 and a low of 104.713 on Wednesday. US Treasury reports TMUBMUSD10Y,
declined, with the 10-year decline of 5 basis points to 3.4301%. Benchmark US equity indices rose.
With the Fed’s latest decision out of the way, the gold trader’s and investors’ goal will remain essentially the same – “closely monitor inflation and economic data to see if the Fed’s actions are delivering results.” wanted, or if
adjustments still need to be made,” Klearman said.
Peter Spina, President and CEO of GoldSeek.com, said gold has “very limited downside” from here, and continues to “build a solid floor around these prices to keep pushing higher.” high towards $2,000″.
“Gold has “very limited downside” from here and continues to “build a solid floor around these prices to continue pushing higher towards $2,000.” ”
He still believes gold is “prepared for a move to $2,000 and beyond” in the third or fourth this year.
“Global central banks will not be able to get inflation under control without collapsing their economies,” he told MarketWatch. “Risks and fears are growing. Gold is in a perfect place here to benefit from the many issues we face.
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