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HomeGoldGold holds close to 1-week low as Powell sticks to hawkish narrative

Gold holds close to 1-week low as Powell sticks to hawkish narrative

(Reuters) – Gold steadied on Wednesday after shedding almost 2% within the earlier session on an elevated greenback, with demand for the non-yielding asset blunted by Federal Reserve Chair Jerome Powell signalling extra charge hikes.

FILE PHOTO: An worker casts ingots of 99.99 % pure gold throughout manufacturing at Krastsvetmet treasured metals plant within the Siberian metropolis of Krasnoyarsk, Russia, January 31, 2023. REUTERS/Alexander Manzyuk

Spot gold was almost flat at $1,813.85 per ounce by 1:44 p.m. ET (1844 GMT) after hitting its lowest since Feb. 28 at $1,809.27. U.S. gold futures settled 0.1% decrease at $1,818.60.

The greenback hovered close to multi-month highs, making gold dearer for abroad patrons. [USD/]

“Gold can rally much more on any dovish information than it may well fall on any hawkish information that reaffirms Powell’s feedback,” mentioned Nicky Shiels, head of metals technique at MKS PAMP SA, including that “this ‘larger for longer’ mantra merely ups arduous touchdown dangers.”

Powell on Wednesday reaffirmed his message of upper and doubtlessly quicker rate of interest hikes, however emphasised that debate was nonetheless underway and a call would hinge on information nonetheless to be issued earlier than the U.S. central financial institution’s coverage assembly in two weeks.

Gold fell almost 2% following Powell’s feedback on Tuesday.

“Gold will commerce defensively, probably straddling $1,800 into the March FOMC as Powell created uncertainty over each the scale and finish of charge hikes,” Shiels mentioned, including the Fed rushing up hikes put a short-term cap on pricing and sentiment.

Benchmark U.S. 10-year Treasury yields firmed on Wednesday, proscribing curiosity in bullion. [US/]

Gold’s enchantment tends to dim when charge hike expectations rise as a result of larger charges enhance the chance price of holding non-yielding bullion.

“There are nonetheless a number of extra event-driven dangers the gold market wants to soak up – Powell as we speak, jobs information on Friday, CPI on Tuesday,” mentioned Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

Silver dipped 0.1% to twenty.04 per ounce, platinum firmed 0.9% to $937.76 and palladium dropped 1.4% to $1,367.33.

Reporting by Bharat Govind Gautam in Bengaluru; Enhancing by Elaine Hardcastle, Jane Merriman and Maju Samuel

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