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Home Gold News Gold Holds Steady Despite Stronger Dollar and Bond Yields

Gold Holds Steady Despite Stronger Dollar and Bond Yields

by anna

On Friday, gold maintained its position despite the influence of a stronger U.S. dollar and rising bond yields. Investors were closely analyzing decisions made by major central banks to keep interest rates unchanged, interpreting this as a sign of potential global economic challenges.

Here are the key points:

Spot gold was up 0.3% at $1,925.40 per ounce, rebounding from its largest daily drop since September 5th, which occurred on Thursday.
U.S. gold futures also rose 0.4% to $1,946.90 per ounce.

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Central banks of major economies have indicated their intention to maintain interest rates at elevated levels to combat inflation, even as global policy tightening reaches a peak after two years.

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Investors are interpreting this stance as a sign that central banks are concerned about a potential slowdown in global economic growth.
The U.S. dollar remained near a six-month high due to expectations of higher interest rates in the United States.

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Benchmark 10-year Treasury yields reached a 16-year high.

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Global equities were on track for their worst week in a month.

Traditionally, investors turn to gold as a hedge against economic uncertainty, but the prospect of higher interest rates tends to dampen enthusiasm for non-interest-bearing assets like gold.

Market expectations include a 45% chance of another rate hike by the U.S. Federal Reserve before the end of next year. Additionally, there is approximately a 42% chance of some easing in the first half of 2024, according to the CME FedWatch tool.

Investors are also monitoring the Bank of Japan’s decision to maintain ultra-low rates while awaiting key purchasing managers’ index (PMI) data from the UK, the U.S., and the eurozone later in the day.

Silver rose 1.4% to $23.70 per ounce, heading for its best week in four.

Platinum added 1.1% to $929.07, and palladium increased 1.1% to $1,277.03.

Gold’s resilience in the face of these factors reflects its status as a haven asset in times of economic uncertainty, even amid rising rates and a stronger dollar.

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