Author of the article:
Gold prices eased on Friday and were
poised for a fifth straight weekly loss, as expectations of a
sizeable rate hike by the U.S. Federal Reserve powered the
dollar and eroded bullion’s appeal.
Spot gold firmed to $1,708.19 per ounce by 1254 GMT,
but has lost about 2% so far this week. U.S. gold futures
also eased 0.1% to $1,704.90.
The dollar held at a two-decade high, making bullion
more expensive for overseas investors.
Gold looks to be in a free fall, and typically buyers will
restrain themselves until the price finds some decent support,
Advertisement 2
said independent analyst Ross Norman.
With the U.S. dollar undergoing an epic rally, it’s apparent
that investors see it as the ‘go-to’ safe-haven asset, Norman
said, adding, there’s “some significant redemptions in the gold
ETF on a daily basis as stale institutional longs liquidate.”
Two of the Fed’s most hawkish policymakers said on Thursday
they favored another 75-basis-point interest rate increase this
month.
Meanwhile, U.S. retail sales increased more than expected
June.
There are chances of a slight bounce back in prices as long
as the stiff support of $1,670 holds the downside, said Hareesh
V, head of commodity research at Geojit Financial Services,
adding that the critical event, however, would be the next FOMC
Advertisement 3
meeting.
Higher interest rates raise the opportunity cost of holding
non-yielding bullion.
The market also took stock of the EU’s plans to adopt its
seventh package of sanctions against Russia, which will add a
ban on imports of Russian gold.
“The EU sanctions against Russian gold will have rather
limited impact. I think this move is more of a gesture. Likely
the Russians will be able to find buyers outside the EU quite
satisfactorily,” Norman said.
In the physical gold market, buyers in some Asian hubs were
drawn to a dip in prices.
Spot silver rose 1.2% to $18.60 per ounce, but was
headed for a weekly decline.
Platinum climbed 0.3% to $846.12, while palladium
fell 2.4% to $1,851.75.
(Reporting by Arundhati Sarkar in Bengaluru
Editing by Sherry Jacob-Phillips, Mark Potter and Jonathan
Oatis)
Financial Post Top Stories
Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.
By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300
