Gold eyes best week since mid-Jan as traders gauge U.S. rate hike path
Shafaq News / Gold prices rose on Friday and looked set to post their biggest weekly gain since mid-January, as the U.S. dollar eased, while traders assessed prospects of further rate hikes by the Federal Reserve.
Spot gold was up 0.4% at $1,843.00 per ounce, as of 0717 GMT, rising about 1.8% so far in the week. U.S. gold futures advanced 0.5% to $1,849.50.
Interest rate hikes to contain high inflation discourage investors from placing money in non-yielding assets such as gold.
“There’s been a little bit of position-squaring ahead of what is the main event risk left for the week, which is a bunch of different Fedspeak and the services ISM number,” said Ilya Spivak, head of global macro at Tastylive.
The dollar index eased 0.2% and was headed for its first weekly loss since January, making bullion more affordable for buyers holding other currencies.
The impact of higher U.S. interest rates on the economy may only begin to “bite” in earnest this spring, an argument for the Fed to stick with “steady” quarter-point rate increases, Atlanta Fed President Raphael Bostic said on Thursday.
The number of Americans filing new claims for unemployment benefits fell again last week, adding to fears that the Fed would keep hiking interest rates for longer.
Another report on Thursday showed labour costs grew much faster than previously estimated in the fourth quarter.
If Fedspeak reinforces that interest rates could move higher still, then “gold could be in for a troubling end of the week”, Spivak said.
(Reuters)
