Gold Prices Hover Above 2023 Lows As Fed Uncertainty Persists

Fancy Designer golden earrings closeup macro image on red background

Gold prices kept to a tight range on Tuesday after recovering slightly from their weakest level this year, as concerns over rising interest rates and anticipation of key U.S. economic readings this week kept traders largely on the sidelines. The yellow metal marked four consecutive weeks of losses as hotter-than-expected U.S. inflation and signs of economic resilience in the country drummed up fears that the Federal Reserve will have enough economic headroom to keep raising interest rates. Spot gold was flat at $1,817.51 an ounce, while gold futures fell slightly to $1,824.20 an ounce by 20:55 ET (01:55 GMT). Both instruments recovered from a two-month low on Monday. Focus this week is on U.S. Purchasing Managers Index (PMI) readings for February, which are expected to show some cooling in economic activity as the world’s largest economy struggles with high inflation and rising interest rates.

Gold prices

But the Fed Has Signaled That it is Seeking.

a further cooling in growth before it can consider pausing its pace of rate hikes. While a majority of traders are pricing in a 25 basis point hike by the central bank during its March meeting, a small group is positioning for a return to a 50 bps hike, given the recent stubbornness in inflation. Rising interest rates bode poorly for metal markets, given that they increase the opportunity cost of holding non-yielding assets. This trade had decimated metal prices in 2022, and is expected to weigh on the market in the near-term. Other precious metals moved in a flat-to-low range on Tuesday. Platinum futures rose 0.2% to $942.70 an ounce, while silver futures sank 0.4% to $20.715 an ounce. Among industrial metals, copper prices fell slightly but kept to a tight range as traders awaited key Chinese business activity data this week. Copper futures fell 0.2% to $4.0018 a pound, and were trading just above a near two-month low. Chinese PMI data is due on Wednesday, and is expected to show that an economic recovery in the world’s largest copper importer remained mixed through February. While the service sector is expected to grow further from 2022 lows, the manufacturing sector is expected to remain in contraction territory.

Related posts

Asian Stocks Dip As Markets Weigh Fed Fears, China Stimulus Hopes

Most Asian stocks retreated on Thursday amid continued concerns over rising interest rates and…
Read more

Asian Stocks Edge Past Weak Economic Signals, Chinese Shares Lag

Most Asian stocks rose slightly on Wednesday as markets weighed worsening economic conditions in the…
Read more

Exclusive-Accounting For War: Ukraine’s Climate Fallout

The war in Ukraine is deepening the climate crisis at time when global greenhouse gas emissions are…
Read more
Become a Trendsetter
Sign up for Davenport’s Daily Digest and get the best of Davenport, tailored for you. [mc4wp_form id="729"]

Leave a Reply

Your email address will not be published. Required fields are marked *