Gold gains as U.S. dollar weakens after Fed decision

Glittering haven: Gold of various weights and sizes sit at Gold Investments Ltd bullion dealers in London. — Bloomberg

BENGALURU: Gold prices gained on Thursday, as the dollar weakened after the U.S. Federal Reserve decided it would end its pandemic-era bond-buying programme in March, with investors now awaiting policy decisions from other major central banks.

Spot gold was up 0.3% at $1,782.81 per ounce, as of 0551 GMT, while U.S. gold futures jumped 1% to $1,783.00.

"Any dollar weakness should see a corresponding rise in gold. The expectation is for a winding back of fiscal and monetary stimulus, if this view is unchanged then it would be reasonable for gold prices to remain below $1,800," said Michael Langford, director at corporate advisory AirGuide.

The dollar index weakened from a three-week high scaled in the previous session after the U.S. central bank said it would pave the way for three quarter-percentage-point interest rate increases by the end of 2022 as the economy nears full employment and the Fed copes with accelerating inflation.

Reduced stimulus and interest rate hikes tend to push government bond yields up, raising the opportunity cost of holding bullion, which bears no interest.

ECB officials are set to call time on the central bank's Pandemic Emergency Purchase Programme but investors will look to see how the six-year old Asset Purchase Programme may pick up the slack, though rate rises are a way away.

Investors now await U.S. weekly initial jobless claims data due at 1330 GMT.

"The unemployment data will not have a large impact on gold ... we have monetary policies from the European region, so that may put some pressure on gold prices but overall, the sentiment is positive," said Jigar Trivedi, a commodities analyst at Mumbai-based broker Anand Rathi Shares.

"The year-end sees $1,840-$1,850 as a resistance for gold."

Spot silver rose 0.5% to $22.16 per ounce, with platinum and palladium rising 0.2% to $920.50 and 3.6% to $1,653.81, respectively. - Reuters

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

gold , US dollar , platinum , stimulus


Next In Business News

Strong economic fundamentals, prudent management to contribute to stronger ringgit
Matrix Concepts announces preview of latest Melbourne project
Poor skinny kid from Malaysia makes it really big
Brent could push past US$150/bbl if Russian oil exports shrink, BofA says
Indonesia to allocate about 1 million tonnes of palm oil for export
UK equities record best week since mid-March
Oil settles up ahead of US driving season
World stock markets rally, treasury yields fall on inflation data
Wall St Week Ahead-Stock rally fanned by hopes of Fed 'past peak hawkishness'
Embracing sustainability

Others Also Read