09/10/2024 – 14:53
Gold closed this Wednesday’s session (9) with a slight drop, monitoring tensions in the Middle East. The strengthening of the dollar against rivals and the rise in interest rates on Treasuries also put pressure on the price of the commodity.
Gold for December closed down 0.35%, at US$2,626.00 per troy ounce, on Comex, the metals division of the New York Mercantile Exchange (Nymex).
Treasury interest rates and the dollar extended gains after Lorie Logan, one of the regional directors of the Federal Reserve (Fed), warned that the slowdown in the country’s inflation could lose strength and slow down the reduction in American interest rates, which put pressure on the metal precious.
Market expectations have now changed to a more gradual pace of monetary policy easing this year, say analysts at Dutch bank ING, in a note. Traders are now projecting 50 basis points of cuts for 2024, down from expectations of 75 basis points from about two weeks ago, ING says.
In general, interest rates have a negative correlation with gold prices, as higher rates lessen the appeal of non-interest bearing precious metals.
For now, gold remains in a shaky position as investors closely watch Fed minutes and upcoming inflation data – events that could be key in determining gold’s direction in the coming weeks, explains senior market analyst at XS.com, Rania Gule. *With information from Dow Jones Newswires.
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