Gold Up as Fed Shows Flexibility, South Korea Hikes Rates -Breaking
By Gina Lee
Investing.com – Gold was up on Thursday morning in Asia, while U.S. Treasury yields gained. It was also shown that the central bank is unlikely to increase interest rates more aggressively.
By 12:15 ET (4:15 GMT), the price had risen 0.14%, to $1.848.96. Gold cut some dollar strength-driven losses after Wednesday’s Fed minutes suggested the central bank would raise interest rates by 50 basis points in June and July 2022 to combat inflation, which has become a key threat to the economy’s performance.
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, according to Tiger Brokers chief strategy officer Michael McCarthy.
However, gold’s response has been quite disappointing, with the minutes also boosting risk sentiment, he added.
U.S. stocks ended higher Wednesday as Fed policymakers felt that the U.S. economic was strong, despite having managed to curb high inflation without creating a recession.
McCarthy said that it looks like gold is on the cusp of an uptrend. Prices could see a bottom around $1850/ounce and possibly move towards $190.
In the meantime, it lowered its target to 1.75 percent as it made its policy determination earlier in the morning.
SPDR Gold Trust P: reported Wednesday that their holdings rose 0.2% from the previous day to 1,069.81 Tons.
The price of other precious metals was down 0.5%. It fell to $943.15. However, it dropped 0.1% to $943.15. At $2,006.61, the rate was not much changed.