Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Gold prices slip as Fed affirms aggressive policy stance

Published 26/05/2022, 12:51 pm
Updated 27/05/2022, 04:47 am
© Reuters. FILE PHOTO: A saleswoman shows gold bangles to a customer at a jewellery showroom on the occasion of Akshaya Tritiya, a major gold buying festival, in Kolkata, India, May 3, 2022. REUTERS/Rupak De Chowdhuri

© Reuters. FILE PHOTO: A saleswoman shows gold bangles to a customer at a jewellery showroom on the occasion of Akshaya Tritiya, a major gold buying festival, in Kolkata, India, May 3, 2022. REUTERS/Rupak De Chowdhuri

By Ashitha Shivaprasad

(Reuters) - Gold prices slipped on Thursday as the U.S. Federal Reserve's aggressive monetary policy tightening plan dimmed the metal's appeal, with additional pressure from a rebound in equities.

Spot gold fell 0.18% to $1,849.52 per ounce by 2:12 p.m. ET (1812 GMT). U.S. gold futures settled up 0.07% at $1,847.6.

Minutes of the Fed's May 3-4 policy meeting released on Wednesday highlighted most participants favouring additional 50 basis point rate hikes at the June and July meetings, although it was no surprise to the market.

"The minutes didn't change anything. The market has started to realise the Fed will continue to take robust measures to control inflation," said Bart Melek, head of commodity strategies at TD Securities.

"The tightening story is not over by any stretch of the imagination, and it's probably a very safe bet to say that the interest rate environment will continue to get more restrictive."

The yellow metal is highly sensitive to interest rate hikes, as it increases the opportunity cost of holding non-yielding bullion.

Gold prices are pressured in part by the stabilization of the U.S. stock indexes this week, said Kitco senior analyst Jim Wycoff in a note. [.N]

U.S. jobless claims fell last week, consistent with a labour market that remains tight amid strong demand for workers despite rising interest rates and tightening financial conditions.

Limiting the bullion's fall, the U.S. dollar hovered near one-month lows, while the U.S. 10-year Treasury yield also fell to lowest since April. [USD/] {US/]

© Reuters. FILE PHOTO: A saleswoman shows gold bangles to a customer at a jewellery showroom on the occasion of Akshaya Tritiya, a major gold buying festival, in Kolkata, India, May 3, 2022. REUTERS/Rupak De Chowdhuri

"Gold seems to falter when it hits anything like a technical resistance and then you get long liquidation and profit taking. So this is the key issue for gold at the moment," independent analyst Ross Norman said.

In other metals, spot silver slid 0.2% to $21.92 per ounce, platinum rose 0.7% to $949.85 and palladium rose 0.2% to $2,010.26.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.