Friday, December 2, 2022

Gold is set to have its best week in three on expectations of fewer Fed hikes

Gold eyes best week in three on bets of smaller Fed hikes


Delhi, India:Gold prices eased on Friday ahead of a significant employment report in the United States, but they were set for their best week in three years as the dollar strengthened in anticipation of slower US Federal Reserve rate hikes and signs of inflation cooling.

As of 0247 GMT, spot gold had fallen 0.3 percent to $1,796.71 per ounce, having reached its highest level since August 10 at $1,804.66 earlier in the session.At $1,810.70, US gold futures were down 0.2 percent.

It would be the second week in a row that gold prices have increased by more than 2.4 percent so far this week.The expectation that the US interest rate peak was imminent weighed on the dollar index, which remained steady throughout the day but was on track for a weekly loss of approximately 1%.

A more fragile greenback makes dollar-evaluated gold more affordable for abroad purchasers.

According to Hareesh V, head of commodity research at Geojit Financial Services in Kochi, India, after Fed Chair Jerome Powell's comment on Wednesday, the dollar experienced a significant correction, bolstering gold's appeal.

He stated, "The $1,805 level may act as an immediate resistance for gold, and a break above this level may trigger fresh rallies."

Powell had stated earlier this week that it was time to slow interest rate increases.Due to the higher opportunity cost of holding the non-yielding metal, rising rates have maintained gold's traditional role as an inflation hedge this year.

Investors are now awaiting non-farm payrolls data from the US Labor Department, which is due at 1330 GMT, to learn how rate hikes have affected the labor market.

"Because it will hint at possible actions from the US central bank, job data would be critical for gold."Hareesh stated that better-than-expected data may boost the dollar and likely impact gold prices, and vice versa."

Platinum remained steady at $1,041.38, palladium lost 1%, and spot silver fell 0.7% to $22.61.

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