Gold Up over Less Hawkish Comments from Fed’s Powell
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By Zhang Mengying
Investing.com – Gold was up on Thursday morning in Asia as comments from the U.S. Federal Reserve Chair Jerome Powell on future interest rate hikes sounded less hawkish than expected.
Gold futures were up 0.93% to $1,739.40 by 12:01 AM ET (4:01 AM GMT). The dollar, which normally moves inversely to gold, edged down on Thursday morning.
The U.S. Federal Reserve raised interest rates by 75 basis points to 2.25-2.5% as markets expected. Fed Chair Jerome Powell sounded less hawkish on taming inflation in his press conference, saying another “usually large” interest rate hike may be appropriate at the September meeting while the final decision will be determined by the incoming economic data.
“Powell left the door slightly open to a review of the rate situation and provided some sort of light at the end of the tunnel that we’re not going to be seeing increasing rates going into next year as well,” ED&F Man Capital Markets analyst Edward Meir told Reuters.
“That knocked the dollar and U.S. yields down causing the flurry we saw in gold. In the near-term, gold prices are expected to move higher with a good chance of testing resistance between $1,780 to $1,800 over the next month.”
Benchmark U.S. Treasury yields fell to hover near two-month lows.
Investors shifted their focus to U.S. gross domestic product for the second quarter, which is due later in the day to see whether a technical recession happens.
In other precious metals, silver gained 2.76%. Platinum jumped 0.33%, while palladium climbed 0.56%.
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Gold Up over Less Hawkish Comments from Fed’s Powell