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Gold heads for weekly fall as Fed officials strike hawkish tone

Soegeefx AppsPrecious Metal MarketGold heads for weekly fall as Fed officials strike hawkish tone

Gold prices rose on Friday but a more hawkish stance of U.S. Federal Reserve officials on stimulus tapering and interest rate rises kept the metal, seen as an inflation hedge, on course for a third straight weekly drop.

Spot gold rose 0.2% to $1,772.53 per ounce by 0649 GMT, after hitting its lowest in nearly a month on Thursday. U.S. gold futures gained 0.6% to $1,773.70.

The metal has declined 1.1% so far in the week as a number of Fed officials suggested the central bank might accelerate stimulus tapering, with Chairman Jerome Powell saying that decision could be reached in its upcoming policy meeting.

“We got the Fed that is more hawkish and an environment where if anything hits the fan, especially with the new variant, traders will likely buy into the dollar. That is a negative environment for gold,” said IG Markets analyst Kyle Rodda.

The Omicron coronavirus variant has sparked fears over the pace of the economic recovery, weighing on risk sentiment.

“We got the Fed that is more hawkish and an environment where if anything hits the fan, especially with the new variant, traders will likely buy into the dollar. That is a negative environment for gold,” said IG Markets analyst Kyle Rodda.

The Omicron coronavirus variant has sparked fears over the pace of the economic recovery, weighing on risk sentiment.

Source: Reuters

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