Gold stuck in range as rate hike bets and recession fears collide


By Ashitha Shivaprasad


(Reuters) – were hemmed in a tight range on Tuesday as prospects of higher interest rates challenged bullion’s safe-haven appeal while risks boosted it.


Spot gold rose 0.1% to $1,824.10 per ounce by 1425 GMT. U.S. gold futures were little changed at $1,824.10.


“Gold is stuck in a range and is going to continue to be in a range in the near term. The market will only break out into a direction after it gets more economic data and information from the Federal Reserve,” said RJO Futures senior market strategist Bob Haberkorn.


Although gold is considered a hedge against and economic uncertainties, rate hikes dim bullion’s appeal by increasing the opportunity cost of holding the asset which pays no interest.


“It’s a snooze-fest in gold . The yellow metal is being pulled in two directions as a hawkish Fed regime clashes with fears,” said TD Securities in a note.


Speaking at the European Central Bank’s annual conference in Portugal, President Christine Lagarde said the bank will move gradually but with the option to act decisively on any deterioration in medium-term .


Fed Chair Jerome Powell is also due to speak on Wednesday.


Gold largely held its ground despite an uptick in the dollar, which usually dims bullion’s appeal for overseas buyers. U.S. 10-year Treasury yields also rose. [USD/] [US/]


“Gold remains a traders’ market – vulnerable to false breaks and quick turnarounds on little news,” City Index senior market analyst Matt Simpson said.


Meanwhile, holdings in the world’s largest gold-backed ETF, the SPDR Gold Trust, recorded outflows for the past five straight sessions. [GOL/ETF]


Spot silver fell 0.2% to $21.09 per ounce.


Platinum climbed 1.1% to $917.62, and palladium gained 0.7% to $1,884.08.


“Platinum and palladium are acting like industrial metals this morning. With China opening up, demand from the automotive industry will rise,” RJO’s Haberkorn said.


 


(Reporting by Ashitha Shivaprasad and Bharat Govind Gautam in Bengaluru; Editing by Devika Syamnath)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor



Source link

Recent Posts

Scan to Download
ios&Android APP

Open trading account and start trading!

Join our happy customers