By Zhang Mengying
Investing.com – Gold was down on Thursday morning in Asia as investors expected aggressive interest rate hikes after U.S. Federal Reserve Chair Jerome Powell said the central bank is fully committed to bringing prices down.
Gold futures were down 0.21% to $1,834.45 by 12:32 AM ET (4:32 AM GMT). The dollar which normally moves inversely to gold, edged up on Thursday morning.
Investors are expecting aggressive interest rate hikes after the Fed Chair’s testimony to the Senate. Powell said on Wednesday that he would not rule out a 100-basis point increase in interest rates, adding that the central bank would take whatever moves necessary to restore price stability.
“With (Fed Chair Jerome) Powell pointing out overnight that 1% rises were a real possibility, it’s a reminder of that constant pressure on gold prices from rising interest rates,” Tiger Brokers chief strategy officer Michael McCarthy told Reuters.
Powell is due to testify to the House later in the day.
“Gold is expected to follow the commodity complex down. It is more likely for gold to trade below $1,800/oz in the next two weeks than not,” said Michael Langford, director at corporate advisory AirGuide.
“Gold is crypto for (Baby) Boomers, it has no meaningful industrial usage and is a psychological store of value much in the same way crypto was for the younger generation.”
In other precious metals, silver plunged 0.65%. Platinum edged up 0.14% while palladium gained 0.69%.