The downside risks for gold are building despite the inflationary backdrop as the dollar is expected to strengthen and economists see tapering starting in April 2022 after an early warning in September
Gold rose for a second day as Federal Reserve Chair Jerome Powell reiterated that higher inflation will likely be transitory. Gold advanced following its biggest weekly decline in 15 months, helped by a drop-in the dollar and a boost from exchange-traded fund investors
The US Federal Reserve (FED) just completed its fourth Federal Open Market Committee (FOMC) meeting of the year last week, an event that is beginning to garner increasing amounts of attention from market participants. Following the meeting’s conclusion on Wednesday, 16 June, the central bank has now signalled that its first interest rate hike may come in 2023 instead of 2024.
Last week, gold posted its worst weekly performance since March 2020 after the U.S. Federal Reserve signaled a sooner-than-expected tightening in its monetary policy. This week, Gold steadied after posting the biggest weekly loss in 15 months as the Federal Reserve’s hawkish shift damped reflation bets.
Gold took a hit after the Federal Reserve signaled monetary-policy tightening could start sooner than previously thought, with prices heading for the biggest weekly decline in 15 months amid a resurgent dollar. The metal has tumbled through key technical support levels, including falling below its 100-day moving average.
Gold fell to a four-week low after the Federal Reserve pulled forward the projected date of interest- rate increases, confirming worries the central bank would soon pare stimulus that’s spurred gains in the metal. They also released forecasts that show they anticipate two interest-rate increases by the end of 2023 – sooner than many thought — and they upgraded estimates for inflation for the next three years.
Gold declined to near the lowest level in four weeks as the U.S. dollar and bond yields rebounded ahead of a key Federal Reserve meeting. Gold steadied near the lowest level in four weeks as investors awaited the conclusion of the Federal Reserve’s two-day meeting for clues on monetary policy.
The country’s gold imports surged to hit 111 tonnes during the month. This is the highest level of import since January 2020. The imports during the month were up by 73 tonnes from the prior month and by 106 tonnes from the same month a year before. The higher imports by the country were mainly on account of escalated gold demand and lower local gold supply.
Gold declined to near the lowest level in four weeks as the U.S. dollar and bond yields rebounded ahead of a key Federal Reserve meeting. Bullion’s retreat from the highest level since January earlier this month came as investors weigh inflation pressures and the Fed’s monetary policy path. Expectations are that the central bank won’t signal scaling back bond purchases until August or September, even if it delivers projections for interest-rate liftoff in 2023.