Wednesday, 28 September 2022

Gold in tight range on higher dollar, more rate hikes expected

Gold prices moved within a narrow range today, Friday, as the dollar stabilized near a 20-year peak, and the possibility of a larger interest rate hike by the US Federal Reserve in the future undermined the attractiveness of the non-yielding yellow metal.

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According to “Reuters”, gold dipped in spot transactions to $1,670.19 per ounce by 0658 GMT, while US gold futures fell 0.2% to $ 1678.20.

A number of central banks, from Indonesia to Norway, raised interest rates on Thursday, following the impact of the US Central Bank, which raised interest rates for the third time in a row by 75 basis points.

The measures taken by the major central banks have led to fears of a global recession.

Although gold is seen as a hedge in times of high inflation and economic uncertainty, raising interest rates weakens its attractiveness because it does not generate any return.

Gold prices have fallen nearly 20% since they crossed the $2,000 mark an ounce in March.

The dollar index is still near its highest level since 2002, which it touched on Thursday.

As for other precious metals, silver fell in spot transactions 0.3% to $ 19.60 an ounce, and palladium fell 1% to $ 2148.01. Platinum also fell 0.7% to $894.27, bringing its losses this week to 1.8%, and it recorded the first weekly decline in three weeks.

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