As investors increased their wagers that the Federal Reserve may be done raising interest rates, gold prices rose somewhat on Thursday, helped by a declining US dollar and Treasury yields following the central bank’s decision to hold interest rates constant.
By 0310 GMT, spot gold had increased by 0.1% to $1,983.77 per ounce. To $1,991.80, U.S. gold futures increased by 0.2%.
Ilya Spivak, head of global macro at Tastylive, said, “I think there may be a little bit of support around the idea that the Fed seems to be signalling that rate hikes are ending.”
As was largely anticipated, the Fed kept interest rates unchanged on Wednesday while officials battled to decide whether financial conditions would be tight enough to contain inflation.
While benchmark U.S. 10-year note rates dropped to a level not seen in more than two weeks, the dollar index was down 0.5%.
In order for market borrowing rates to influence future monetary policy decisions, Fed Chair Jerome Powell stated that they would need to be persistently higher.
Because of the events in the Middle East, there is also a considerable geopolitical risk premium for gold. The possibility that bond rates are likely nearing a top right now is one reason why I believe gold will be supported more and more, said Spivak.
Gold surged past the crucial $2,000 per ounce mark last week as investors turned to metal in response to the escalating instability in the Middle East. Gold is a secure investment during periods of political and financial upheaval.
The world’s largest exchange-traded fund backed by gold, SPDR Gold Trust, saw its holdings increase 0.24% to 861.51 tonnes on Wednesday, which is a sign of confidence.
In order to get more clues about the Federal Reserve’s interest rate trajectory, markets are now awaiting Friday’s release of the non-farm payrolls data in the United States.
Spot silver remained stable at $22.98 per ounce, while palladium increased 1% to $1,114.02 and platinum increased 0.6% to $926.08.