Gold dips on rising yields after Fed minutes signal patience -Breaking
By Bharat Gautam
(Reuters] – Gold prices dropped on Thursday after Treasury yields increased. The appeal of bullion had been somewhat restored by minutes at the U.S. Federal Reserve Policy meeting, which showed that the central bank is unlikely to increase interest rate increases.
As of 0220 GMT, the price per ounce fell 0.2% to $1.849.75 The U.S. gained 0.1% and was at $1,848.20
Following the Fed meeting in May, notes suggested that interest rates would be raised by 50 basis point at the Fed’s June and July meetings to fight inflation. They agreed that this was a critical threat to the economy’s performance. Gold responded with some dollars strength-driven gains on Wednesday. [USD/]
It was positive for gold that the Fed will put in two more half-percentage-point hikes and then wait to see its economic impact, said Michael McCarthy, chief strategy officer at Tiger Brokers, Australia.
McCarthy noted that the gold response was quiet disappointed, and that minutes had also raised risk sentiment.
Holding bullion is expensive because it yields no income and has higher interest rates. However, gold is considered a safety-haven asset in times of financial crisis. [US/]
Wall Street closed higher Wednesday due to investors being encouraged by the fact that Fed policymakers felt the U.S. economic was strong while they struggled to rein in inflation without creating a recession. [MKTS/GLOB]
McCarthy stated that it looks like gold is on the cusp of an uptrend. Prices could see a bottom around $1850/ounce and possibly move towards $1900.
SPDR Gold Trust P:, the world’s most important gold-backed exchange traded fund, announced that its holdings rose 0.2% on Wednesday to 1,069.81 tonnes from 1,068.07 tons the day before. [GOL/ETF]
Spot silver fell 0.5% to $21.86 an ounce. Platinum eased 0.1% to $943.15, while palladium was unchanged at $2,006.61.