Finance

Gold fell to its lowest level in 29 months ahead of the Federal Reserve meeting

Gold fell to its lowest level in 29 months ahead of the Federal Reserve meeting

(Gold) is still hovering around lows and a big part of that is the Fed’s announcement on WednesdayDaniel Pavilonis, chief market analyst at RGO Futures, said, adding that higher Treasury yields were also weighing on prices.

The Fed, at the end of the two-day policy meeting, is expected to raise interest rates by 75 basis points to combat high inflation, with markets even seeing a 20% chance of a 100 basis point hike.

Meanwhile, concerns about rising inflation also led other central banks to tighten monetary policy.

Although gold is considered a hedge against inflation, higher interest rates raise the opportunity cost of owning zero-yield bullion.

For its part, the dollar remained near a two-decade high, making gold more expensive for foreign buyers. Meanwhile, the yield on 10-year US Treasuries rose to its highest level in more than 11 years.

Meanwhile, silver fell 1.1% to $19.35 an ounce, platinum fell 0.3% to $904.66, and palladium fell 0.8% to $21118.20 an ounce.

It should be noted that the London Gold Market – the largest gold trading center in the world – was closed due to Queen Elizabeth’s funeral, limiting trading volume on Monday.

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