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Gold steadies after tumbling below $2,000, Powell speech awaited By
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Introduction-- Gold prices were muted on Friday after falling sharply below key levels this week as improving se ...
-- Gold prices were muted on Forex Group Forex Official WebsiteFriday after falling sharply below key levels this week as improving sentiment over a U.S. debt deal saw traders dump safe havens, with focus now turning to more cues on monetary policy from the Federal Reserve.
The yellow metal tumbled below the key $2,000 level this week, blowing past major support levels after the Biden administration expressed optimism that a deal to lift the U.S. debt ceiling could be reached this week.
This sparked a rally in most risk-driven assets on the prospect of no U.S. defaults. The also surged to seven-week peaks, further pressuring metal markets by making purchases more expensive for international buyers.
rose 0.1% to $1,958.99 an ounce, while rose 0.1% to $1,961.40 an ounce by 20:19 ET (00:19 GMT). Both instruments were trading down between 2.6% and 3% for the week, their worst drop since late-January.
Hawkish comments from Fed officials also rattled gold markets this week, as the prospect of U.S. interest rates staying higher for longer pointed to an increased opportunity cost of holding non-yielding assets.
Focus is now squarely on a panel discussion involving at a conference in Washington, D.C., for any more cues on monetary policy. General consensus among the Fed speakers this week was that inflation remained too high, and that the Fed would need to remain hawkish to bring down prices, potentially entailing more rate hikes.
show that markets are still positioning for a pause in the Fed’s rate hikes by June. With rates remaining higher for longer, gold and other precious metals are likely to remain under pressure.
But the yellow metal may yet rise further this year, especially as economic conditions deteriorate and as the Fed eventually pauses its rate hike spree. Swiss bank UBS still expects gold to .
Other precious metals steadied on Friday, with and futures moving in a tight range. But both metals were also set to lose about 2% each this week.
Among industrial metals, copper prices rose slightly on Friday, but were set for losses this week amid worsening sentiment over major importer China.
rose 0.1% to $3.6975 a pound, and were down 0.8% this week, as economic readings from China continued to signal a slowing post-COVID recovery. The red metal was set for a fifth straight week of losses.
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